Latest / Restaurant Business with Fexingo: Food Service, Hospitality, and Independent Operators / How Restaurant Menu Engineering Boosts Profit by 20 Percent
Transcript
- Lucas: You open a menu at a restaurant. You probably think you're just choosing what sounds good. But what you're actually doing is walking through a piece of architecture that's been designed, tested, and iterated on to steer you toward the most profitable items. Luna: Menu engineering. I've heard the term, but I've never really understood how deliberate it is. Are we talking about the layout, the descriptions, the prices — all of it? Lucas: All of it. And the data backing it is surprisingly precise. There's a concept called the 'golden triangle' — eye-tracking studies show that when a diner opens a menu, their eyes go first to the center, then up to the top right, then across to the top left. That top right quadrant is prime real estate. Restaurants that put their highest-margin items there see a 20 to 30 percent lift in orders for those dishes. Luna: Twenty to thirty percent, just based on where it sits on the page? That's wild. So the pasta with a 70 percent food cost that's just a loss leader — that goes in the bottom left corner, I assume. Lucas: Exactly. Menu engineers actually classify items into four buckets based on two dimensions: profitability and popularity. A 'star' is high profit and high popularity — that's your hero dish, and it goes in the golden triangle. A 'plowhorse' is low profit but high popularity — you keep it because it brings people in, but you don't highlight it. A 'puzzle' is high profit but low popularity — you might need to rename or reposition it. And a 'dog' is low profit and low popularity — that's a candidate for removal. Luna: So the menu is a portfolio. I love that framing. What about the actual pricing? I've noticed more places dropping the dollar sign. Lucas: That's one of the simplest tweaks. A study from Cornell's Center for Hospitality Research found that when restaurants removed the dollar sign from their menus, the average check increased by about 8 percent without any change in prices. The theory is that a dollar sign signals a transaction, a loss of money. Without it, the number feels more abstract. You anchor on the experience, not the cost. Luna: Interesting. And decimals? I've seen some places do '19' instead of '19.00'. Lucas: Right. Those are called 'charm prices' — ending in.95 or.99 can signal a bargain, but in fine dining, you often see whole numbers like $19 or $38. A study by MIT and the University of Chicago showed that charm prices increase sales by about 24 percent over round prices, but that effect varies by context. For a casual spot, a $9.95 burger outperforms a $10 burger. For a steakhouse, $48 feels more premium than $47.95. Luna: So you need to match the pricing psychology to the brand. What about description length? I've seen menus with a paragraph for one dish and just a line for another. Lucas: Longer descriptions actually increase perceived value. A lab study by the Journal of Consumer Research found that dishes with seven-word descriptions generated 27 percent higher willingness to pay than three-word descriptions, all else equal. But there's a catch — the words have to be sensory. 'Crispy', 'juicy', 'roasted', 'caramelized' — those trigger appetite. Generic words like 'delicious' or 'fresh' don't move the needle. Luna: So a menu is part copywriting. I'm thinking of a menu I saw recently — they had the prices listed in a column on the right, all aligned. That seems standard. Is that bad? Lucas: It's not terrible, but it makes price comparison easy. A better approach is to scatter prices so that the eye can't quickly scan from dish to price. Some high-end restaurants put the price right after the description, almost as an afterthought. Or they use a 'price anchoring' technique — put one very expensive item at the top of a section, making everything else seem reasonable. That's why you'll sometimes see a $95 steak next to a $42 pasta. Luna: The decoy effect. That's classic behavioral economics. So in practice, how does a restaurant actually roll out a menu redesign? Is it a big risk? Lucas: There's a great case study from a Chicago steakhouse called Bavette's. They did a full menu engineering overhaul in early 2025. They moved their highest-margin items — a bone-in ribeye and a truffle mac — to the top right. They removed dollar signs, added sensory copy, and grouped lower-margin items like salads and sides in the bottom left quadrant. Over the next three months, their gross margin on food went from 64 percent to 68.5 percent — a 4.5 point gain. That's huge in a industry where margins average around 5 percent. Luna: Four and a half percentage points on margin. That could be the difference between a profitable year and a loss. Did they see any pushback from customers? Lucas: Minimal. In fact, customer satisfaction scores actually ticked up slightly, which the owners attribute to the more appealing descriptions and layout making the ordering experience smoother. The key is that menu engineering shouldn't feel manipulative — it should feel helpful. You're guiding the diner to a choice they'll be happy with, which happens to also be good for your bottom line. Luna: Right, it's a win-win if done right. So what's the first step for an operator listening right now? Say they have a menu that hasn't been touched in two years. Lucas: First step: pull your sales mix data and cost data for every item. Rank each dish by profit contribution and by popularity. That gives you your four quadrants. Then look at your current menu layout — is your star dish buried somewhere? If so, move it to the golden triangle. Next, audit your descriptions: are you using sensory language? If not, rewrite them. And finally, test your prices: consider dropping dollar signs and using charm prices if appropriate. You don't have to do a full redesign at once. Try one tweak, measure the impact for a month, then iterate. Luna: That's practical. I'd add one thing — don't forget about the beverage menu. I've seen places use the same engineering principles on wine lists and boost per-head spend by 15 percent just by moving the high-margin wines to the top right. Lucas: Absolutely. The same principles apply to drink menus, and often the margins are even better on beverages. So if you're running a restaurant, the menu in your hands right now is likely leaving money on the table. A thoughtful redesign, based on data, can be one of the highest roi projects you do all year. Luna: It's almost like a secret weapon. And you know, it's conversations like this that make me glad we have a platform to dig into the details. We deliberately don't run ads on these episodes — no sponsors, no commercials. If you find value in that, and if these insights have helped you think about your own business differently, there's a simple way to support the show. Lucas: Yeah, a lot of listeners have asked how they can help keep this ad-free. It's straightforward: buy me a coffee dot com slash fexingo. That's it. No tiers, no perks, just a way to say this content matters to you. Luna: And it genuinely helps us keep the focus on the business, not the ad copy. Alright, back to menus. One last thing I've been curious about — what about the physical feel? The weight of the paper, the texture, even the font. Lucas: That's a whole other layer. A heavier, coated paper stock signals quality. A study from the Journal of Sensory Studies found that guests who received a menu on high-grammage paper rated the food quality 12 percent higher than those with a flimsy menu, even when the food was identical. Font also matters — sans-serif fonts like Helvetica are easier to read and convey modernity, while serif fonts like Times New Roman suggest tradition and formality. But avoid overly ornate scripts — they can reduce readability and slow down ordering, which can hurt table turn time. Luna: So the menu is a multi-sensory object. It's not just what's on it, but the paper, the font, the weight. That's a lot to consider. Lucas: It is, but the return on investment is real. A well-engineered menu can add 5 to 10 percent to your bottom line with no additional labor or food cost. It's one of the few levers in a restaurant that's almost pure upside. Luna: And it's something you can start changing today. Even just moving one item to the top right corner and rewriting its description. Lucas: Exactly. Start small, measure, and watch what happens. I'd love to hear from operators who try it — get in touch and let us know how it goes.