Yogi Berra, Hall of Fame catcher for the New York Yankees, was famous for his Yogi-isms. These are the insights and witty observations he became famous for. One of his most famous, “It's DéJà Vu all over again” is highly applicable to restaurant operators. Hard hit by shutdowns during the pandemic in 2020, the restaurant industry is again facing tumultuous times. Now, it’s rising costs and declining consumer traffic due to the inflationary U.S. economy. That said, it’s critical that restaurant operators pursue intelligent solutions to help offset rising costs and declines in consumer traffic. One such solution involves adopting the baseball playbook and executing the Triple Play. For restaurants, the Triple Play concerns the menu, and involves simplification, pricing, and communications. The following elaborates on these and their benefits.
Menu Simplification boils down to streamlining your menu through the reduction of menu items. In many instances this is done through a sales and profitability analysis, coupled with a menu operations analysis which ranks menu items by their complexity. While these are important analyses to consider, sound menu simplification also includes conducting a TURF analysis, which factors in your customers’ input. In simple terms, TURF provides two important types of information:
- The shortest list of menu items needed to satisfy the majority of your customers and
- The average number of items that each consumer would find on that list that they might like to order
Taken together, menu simplification, built around the previously mentioned analyses, delivers meaningful benefits that can improve business performance. These include:
- Labor savings due to a menu with fewer and less complex menu items
- Cost of goods savings because of fewer necessary ingredients
- Increased customer throughput because of faster order times due to a simpler menu to navigate
Pricing Optimization, the second part of the Triple Play, focuses on strategically pricing your individual menu items, so collectively, they maximize your overall profitability. To accomplish this, a multi-pronged approach works best. First, analyze POS data over two to three years to track and clearly understand your customers’ actual buying behavior with respect to individual menu items, pairings, bundles, etc. Second, conduct a consumer price/value study to determine consumer attributes towards pricing of every item on your menu. The findings and analysis from this study will identify the extent to which some menu items (or categories of items) are considered overpriced, reasonably priced, or great value for the money. The latter point signifying opportunities to raise prices.
Communications Optimization is the final piece of the Triple Play. Menu communications are your top marketing and selling tools (whether it be your mobile app, menuboard, handheld menu, or self-order kiosk). Successful menu communications programs generate a significant return-on-investment. Optimizing menu communications can boost average ticket and profitability, grow transactions, increase customer throughput, and generate customer loyalty. In fact, optimized menu communications have one of the highest returns on investment of any option available to restaurant brands.
Achieving best-in-class menu communications in today's market requires far more than clever design and graphics. Effective menu communications are the result of superior analytics (customer research, financial data, and communications), coupled with strategic thinking.
Individually, each of the Triple Play solutions can incrementally improve your restaurants business performance. However, when undertaken together, their combined effect will deliver significant business results, helping you become a winner, not only in today's inflationary economy, but in the years ahead. It's this latter point where I urge you to keep Yogi's most famous Yogi-ism top of mind: “It ain't over till it's over.”
Tom Cook is a Principal of King-Casey, a restaurant and foodservice business improvement firm. King-Casey provides strategic menu optimization advice and a range of services to help clients manage overall food and beverage offerings affecting their positioning, reputation, and business growth. For more information, visit www.king-casey.com or contact Tom Cook at 203/571-1776 or firstname.lastname@example.org