In this chapter, we illustrated menu engineering as a technique for analyzing menu sales and providing helpful information for increasing gross profit. We defined stars, puzzles, plowhorses, and dogs, and suggested ways to change the classification of menu items to improve the profitability of the menu. We showed how plotting the menu items on a graph provides a visual picture of menu items and their relationship to each other. We explained that using a computerized spreadsheet can make the task of constructing and main- taining a Menu Engineering Worksheet much easier than a manual method. Finally, we discussed the use of the 70 percent and the 100 percent figure in Box Q on the worksheet to determine whether an item is to be classified as high or low for the number of an item sold.
# KEY TERMS IN THIS CHAPTER
Average contribution margin Menu mix percent Dog Plowhorse Menu contribution margin Puzzle Menu engineering Star
$ QUESTIONS AND PROBLEMS
1. George’s Restaurant had the following menu sales during a period of one week: a. Calculate the menu mix percentage for each menu item. b. Calculate menu contribution margin for the week. c. Calculate menu food cost percentage for the week. Menu Item Sales Food Cost Menu Price Strip Steak 73 $6.50 $18.90 Fried Chicken 90 $3.90 $12.75 Lamb Chops 55 $7.00 $20.35 Fried Scallops 92 $5.90 $18.50 Broiled Haddock 85 $4.50 $15.65
2. Is contribution margin for menu items more significant than food cost percentage when determining restaurant profit? Explain your answer. Does a large contribution margin for each menu item necessarily mean that the restaurant is profitable? Explain. 3. Would a Menu Engineering Worksheet that lists appetizers, entrées, and desserts be useful to management in determining which menu items to delete, raise or lower price, or otherwise change? Explain why or why not. 4. Under what circumstances might dogs be kept on the menu rather than eliminated? 5. What can be done to puzzles to increase menu profitability? Explain your answer. 6. Why are all stars not the same? Explain why one would be better than another. 7. Under what circumstances might you eliminate a plowhorse from the menu? 8. What are the possible positive and negative consequences of substitut- ing different menu items for those with low contribution margins? 9. In what ways is the graphic representation of dogs, plowhorses, puz- zles, and stars helpful in determining what to do about altering menu items? 10. a. Complete the Menu Engineering Worksheet reproduced in Figure 11.6, filling in the missing information. b. Prepare a graph similar to Figure 11.2 showing stars, plowhorses, puzzles, and dogs. c. Which items, if any, should be removed from the menu? Remain unchanged? Be increased in price? Be featured or repositioned on the menu? Why?
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• FIGURE 11.6 • Menu Engineering Worksheet Restaurant Smuggler’s Inn Period 6/7–6/14
A B C D E F G H L P R S Item Menu Menu Menu Item # Menu Food Sales CM Cost Revenues Menu CM CM MM Menu Item Name Sold Mix % Cost Price (E-D) (D*B) (E*B) (F*B) Category Category Classification Fried Chicken 175 $3.00 $ 7.00 Sirloin Steak 190 $5.50 $13.00 Baked Ham 40 $4.00 $ 8.00 Stuffed Sole 45 $7.00 $13.00 Broiled 80 $8.00 $15.00 Swordfish Lobster 60 $7.50 $16.00 Veal Marsala 90 $5.50 $14.00 Roast Prime 145 $6.00 $13.00 Rib Lamb Chops 125 $6.00 $ 9.00 Beef Burgundy 50 $3.50 $ 7.00 Column N I J M Totals $ _ $ _ $ _ K = I/J O = M/N Q = (1/no. of items ! 70%) 7/25/08 10:13:09 AM
