Sponsored by Restaurant365
Menu engineering is a game-changer for restaurant operators looking to increase sales. Menu engineering focuses on two essential components: understanding your costs and identifying what it takes to drive profitability. This means analyzing customer ordering patterns and preferences, as well as employing strategies to guide those choices. By evaluating key metrics, operators can strategically shape their menus to maximize profit potential, but without the right tools the process can be lengthy and overwhelming.
Often relying on spreadsheets, many operators spend hours tracking invoices, calculating costs, and analyzing trends, a process many only do once a year, if at all. “It’s a huge amount of manual work,” says Aaron Alexander, solutions engineer at Restaurant365. “Just recently, someone told me they spent an entire summer on it. The issue is, by the time they’re done, the data is outdated. With prices constantly changing, having that information on demand is crucial in today’s fast-evolving landscape.”
Restaurant365 is an all-in-one restaurant management platform that seamlessly connects with POS systems and vendors. Through automated data collection, Restaurant365 provides operators with immediate access to ingredient costs, menu profitability, and other critical metrics, in a simple, on-demand report. “Restaurant365 allows operators to focus less on data collection and more on creating actionable plans,” Alexander says.
One key to effective menu engineering is understanding where losses happen and identifying solutions. For instance, if a particular item has low profitability or popularity, Restaurant365 can help operators pinpoint specific areas for adjustment, whether it’s adjusting the price, changing portion sizes, or sourcing alternative ingredients. “We often compare similar items within a category—say, different burgers—to see what’s working well profit-wise and then adjust other items to match that success,” Alexander says.
The platform’s menu analysis tool categorizes items into groups—such as stars (high-margin, high-selling items) and dogs (low-margin, low-selling items)—enabling operators to see which menu items deserve more attention or a potential overhaul. Operators can even set a target margin for a category and the system will recommend a price point to achieve that margin. “You might increase a price to boost margins or lower it to drive popularity, depending on the strategy,” Alexander says “It’s about using data to make informed decisions.”
The recipe management tool within Restaurant365 plays a crucial role in this optimization process. By tracking raw ingredients and linking recipes directly to POS items, operators gain visibility into inventory usage and portion control down to each ingredient. “We link recipes directly to POS buttons, so when a quart of ranch is sold, it’s automatically calculated back to the raw ingredients used, all the way down to, say, the 22 quarts of buttermilk purchased for making it,” Alexander says. “For multi-location businesses, this can reveal company-wide savings on ingredients,” Alexander says.
Alexander recommends conducting menu engineering quarterly or even monthly. ”While they may not change menu prices that frequently, they can still track trends and better prepare for future adjustments.” Alexander says. With Restaurant365’s real-time data and automated reporting, operators gain instant insights into costs, profitability, and item performance making it easy to optimize menus and maximize margins as often as needed.
Visit the Restaurant365 website to transform your business today.
By Olivia Schuster
