Latest / Restaurant Business with Fexingo: Food Service, Hospitality, and Independent Operators / How Restaurant Menu Item Count Affects Food Costs
Transcript
- Lucas: So Luna, you know how every spring, half the restaurants in the city print a brand-new menu with fifteen new items, and half just quietly cross out the stuff that didn't sell? Luna: Yeah, and the second group is usually the one that's still in business three years later. Lucas: Exactly. And today I want to dig into something that sounds almost too simple to matter: the number of items on your menu. We always talk about typography, table turns, plate presentation — all the subtle stuff. But the raw count, the sheer breadth of what you offer, can quietly eat your food cost percentage alive. Luna: Give me a concrete number to wrap my head around. Lucas: Okay, so there was a 2025 study out of a Midwest restaurant group — twelve casual dining locations, all independent, not a chain — that tracked what happened when they cut their menus from an average of eighty-nine items down to forty-seven. Over the next six months, their food cost percentage dropped by nine points. Nine percentage points. That's not a rounding error. Luna: Nine points is massive. That's the difference between barely breaking even and actually paying yourself. Lucas: Right. And prep time dropped twenty-two percent. The kitchen was doing the same volume of covers, but with way less slicing, dicing, and par-cooking. That's the part that gets me — the labor savings compound with the food savings. You're not just buying less stuff, you're spending less time turning it into dishes. Luna: So what was on the chopping block? Were they just cutting the weird stuff, or did they have to sacrifice some crowd favorites? Lucas: They were pretty systematic about it. They tracked sales and food cost per item for a full quarter. Anything that was below the median in both sales volume and margin got flagged. And then they looked at the ingredient overlap — if two dishes both used a specialty cheese that nothing else on the menu touched, one of them had to go. Luna: So it's not just about popularity, it's about how an item fits into the whole ingredient ecosystem. Lucas: Exactly. You can have a bestseller that's actually killing you on margin if it's driving a weird inventory item that only it uses. But the bigger structural issue is what I call the 'supplier minimum trap.' The more SKUs you carry, the more you're at the mercy of distributors who have minimum order quantities. You end up ordering a case of something you don't really need just to hit the threshold, and then it sits in the walk-in and oxidizes. Luna: Yeah, that walk-in is a graveyard of good intentions. I saw a restaurant last year that had a full shelf of a specific brand of harissa that they used in literally one sandwich. Lucas: Right. And that's the thing — every one of those one-off ingredients is a little monthly tax. You're paying for storage, for the labor to handle it, and for the waste when it inevitably doesn't sell before it goes bad. The study found that the average item on a forty-seven-item menu used about three-point-two shared ingredients, whereas on the eighty-nine-item menu, the average item used closer to five, with a lot more of them being exclusive to that single dish. Luna: So you're not just cutting items, you're cutting the web of ingredients that tie them all together. That's the real lever. Lucas: And the impact on the customer side was interesting too. They surveyed regulars before and after the change. The worry is always that people will feel like their options are being taken away. But what they actually found was that satisfaction with the menu went up. People reported it was easier to decide, and they felt more confident that the dishes they chose were going to be good. Luna: Choice overload — it's a real thing. You see it in every consumer study from cereal aisles to 401k plans. But in a restaurant, it's even more visceral, because you've got a hangry customer and a server waiting to take the order. Lucas: Yeah, and a menu that's too long actually slows down the table turn, which we've talked about before. Every extra minute spent deciding is a minute of revenue lost on that table. Luna: So what's the right number? Is there a magic sweet spot? Lucas: It depends on your concept, but the data suggests that for a typical independent restaurant, somewhere between thirty and fifty items is the sweet spot. Under thirty and you risk feeling too limited, especially for regulars who want variety. Over fifty and you're probably carrying dead weight. Luna: And of course, if you're a diner or a place with a huge menu as part of the brand — like one of those old-school Greek diners — you might have a different calculus. Lucas: Oh, absolutely. There are exceptions, but they're usually propping up the volume with sheer breadth and they have the staff and the walk-in space to handle it. For everyone else, the math is pretty unforgiving. Luna: Before we go further — you know, this is the kind of conversation that we get to have because the show is ad-free, and that's only possible because some listeners chip in a couple of dollars a month. If you've gotten something out of these episodes, a small contribution makes a real difference. It's buy me a coffee dot com slash fexingo. Lucas: Yeah, it genuinely does. Even a few bucks a month helps cover hosting and research time. Thanks to everyone who's pitched in — it keeps this going. Luna: Alright, back to the chopping block. So how does an operator actually go about trimming their menu without making their regulars angry? Lucas: That's the millio-dollar question. First thing: don't just slash and burn. You want to use a structured approach. Start by pulling your sales mix for the last three months, and rank every dish by revenue and by food cost percentage. Anything in the bottom quartile of both — that's a candidate. Luna: What about dishes that are popular but low-margin? You can't just cut your top seller. Lucas: Right, those you hold on to, but you look at whether you can re-engineer them. Maybe swap a pricey ingredient for something cheaper that still works, or adjust the portion size slightly. But the key is to focus on the bottom of the barrel first — the dish that sells twice a week and has a thirty-percent food cost. Luna: And after you cut, what about the folks who loved that dish? You don't want to lose them. Lucas: You'd be surprised. In that study, they only got a handful of complaints, and most of those people came back once they saw the new menu. The psychological shift is that a shorter menu signals quality — it says 'we focus on doing a few things really well.' Luna: Plus, you can always run something as a special. That gives you flexibility without the permanent commitment. Lucas: Exactly. Specials are your test bed. You can bring back a dish for a weekend, gauge the reaction, and if it's a hit, you can find a way to add it back in a smarter way, maybe with more shared ingredients. Luna: So what's the timeline for a menu trim? Is this a one-weekend thing or a gradual process? Lucas: Most operators I've seen do it in two phases. First, they cut the obvious dead weight — anything that sold fewer than, say, five portions a week. That gets you down twenty or thirty percent right away. Then they wait a month, see how the kitchen adapts, and make a second round of cuts based on the new data. Luna: And what about suppliers? If you're ordering less of certain items, can you renegotiate with them? Lucas: Sometimes, but the bigger win is that with fewer SKUs, you can actually increase your volume on the key items and get better pricing. In the study, they were able to negotiate a two-percent discount on their top three produce items because they were buying more of each. So it's not just about cutting costs, it's about concentrating your buying power. Luna: That's a smart angle. You're turning a liability into an asset. Lucas: And the last piece is communicating the change to your staff. The servers need to be able to sell the new menu with confidence. If they're as excited about the shorter, more focused menu as the chefs are, that energy transfers to the customer. Luna: So bottom line: fewer items, lower costs, happier kitchen, and no hit to customer satisfaction — maybe even an improvement. Lucas: That's the takeaway. And it's one of those rare changes that touches every part of the operation — purchasing, prep, service, even the vibe of the place. The menu is the heart of the restaurant, and sometimes it needs a bit of a rest. Luna: A menu that's lighter on its feet. I like that image. Lucas: Next time you're in a restaurant and the menu feels tight and intentional, you'll know why. And if you're an operator looking to make a change, start with your menu count. It might be the easiest money you ever make.