The National Restaurant Association (NAR) reports that bottom-line costs are impacting restaurants. If you haven't used menu engineering, you might be making less on former profitable items than you realize.

Profitable restaurants don't reach profitability by chance - it's a strategic process.

If you start with restaurant menu engineering, you'll design the foundation for profitability: your menu. We're going to show you how to create a menu that drives profits with techniques that are working for some of the world's most profitable eateries.

menu engineering matrix

What is Menu Engineering?

Menu engineering is a "buzzword," but it's one that works to do a few things:

  • Maximizes your menu's profitability
  • Implements menu techniques proven to work by using strategic metrics
  • Increases the popularity of certain menu items

Whether you want to update or create a restaurant menu from scratch, you'll find a menu engineering matrix that will entice customers to purchase your most profitable items.

Key Metrics to Consider When Analyzing an Existing Menu

If you have an existing menu, you need to begin analyzing it to understand what's working and not working for your eatery. The elements that you'll want to look at are:

Item Cost

What is the cost of goods sold for each and every menu item on the menu? You need to calculate the total cost of all ingredients used in a dish. If you don't know what each item costs to create, you can't know what price will leave you with adequate profit margins.

Item Popularity

Certain menu items will sell more often than others. For some menu items, they may cost more in food waste than necessary for the amount of times that they're ordered. Eliminating these less popular menu items will allow you to:

  • Save on specialty ingredients
  • Save on food waste
  • Trim your menu down

List each item by order frequency so that you know which items to place where on your menu to maximize sales using menu engineering.

Item Profitability

How profitable is a menu item? You need to consider a lot of factors:

  • Item cost
  • Labor costs
  • Other expenses

You want to consider every last cost involved with cooking a certain menu item so that you can see which high-profit items you need to promote more, and which may add to your restaurant's profitability.

Adapting Your Menu to be Profitable

Your menu can become profitable if you leverage psychology to encourage sales with proper menu item:

  • Descriptions
  • Placements
  • Pricing

You can do this without a menu engineering worksheet by starting with categorization and the steps that we recommend below.

what is menu engineering

4 Steps Start Using Menu Engineering

1. Start by Categorizing Your Menu

After you've determined the cost and profitability of all menu items, you can then use the popularity and sales data to categorize each item by:

  • Category 1: High profits and sales
  • Category 2: High profits and low sales
  • Category 3: Low profits and high sales
  • Category 4: Low profits and low sales

Your menu items with low profits and sales should be the first foods that people see on the menu because they contribute the least to your overall profits.

Once each item is categorized properly, it's time to begin designing your menu to turn it into one that's profitable and encourages sales strategically.

2. Design Your Menu Based on Your Categories

Your Category 1 menu items need to be highlighted because they drive profits and sales to your restaurant. For example, let's say that one of your category 1 menu items is a garlic and butter steak.

People love ordering this item and rave about it in every review.

You can then:

  • Post this item at the top of the menu
  • Put a professional picture next to it

If you don't want to use a photo, you can use an icon, different colors or other graphics to make the menu item stand out.

You can now begin to strategically add:

  • High-profit and low sale items (category 2) may be able to have their prices adjusted lower to drive more sales at the sacrifice of profits.
  • Low-profit and high sale items (category 3) should have their price adjusted higher to learn how it impacts sales and what pricing the customer will push back on
  • Start removing your category 4 items from your menu because they're not adding to your bottom line and are taking up valuable menu real estate.

3. Leverage the Power of the Golden Triangle

Consumers have been studied extensively to better understand what someone does when they look at menus and catalogs. You'll find that the golden triangle is one of the most prominent techniques that shows people will:

  • Look to the middle center of the menu
  • Top right of the menu
  • Top left of the menu

People use this triangle eye movement when they view any menu, which leads to our next step.

4. Shorten Your Menu

The golden triangle is a profitable strategy to increase sales, so you will want to remove some menu items to make it shorter. Remove those low profit and low sale items to keep your menu space at a premium.

You've successfully engineered your menu to be more profitable and help you add to your eatery's bottom line. Of course, you'll want to test out your new menu to learn how well it works for you or not.

Give your menu a few weeks or months to see if it improves sales before switching things up again.

A few additional tips are:

  • Update your online menu
  • Print out new physical menus

Training your waitstaff to upsell and make recommendations is something that high-end eateries do, and you need to do the same. For example, if you're a restaurant known for its steaks, you need to recommend high-end fine wines along with other options to patrons.

Upselling through strategic recommendations is a great way to add to your restaurant's sales and profits.

Increasing your average sales price for each ticket will allow you to grow your restaurant with the same, loyal customer base.