Latest / Restaurant Business with Fexingo: Food Service, Hospitality, and Independent Operators / How Menu Engineering Profits From Your Hunger
Transcript
- Lucas: If these conversations have moved your work forward in some small way, you know that consistency is what keeps this show running. And if today was worth a coffee to you, that's the link — buy me a coffee dot com slash fexingo — that's F. E. X. I. N. G. O. Luna: Thanks for the support. It really does help us keep digging into the details others miss. Lucas: So let's talk about the last thing you looked at before ordering dinner. Was it the app? The physical menu? Or did you just scan the room? Because in restaurant economics, the menu isn't just a list of prices. It's a carefully engineered map designed to guide your brain away from the cheap stuff and toward the profitable stuff. Luna: I always thought menus were just logistical necessities until I started seeing patterns in how my favorite spots changed them seasonally. Lucas: That seasonal change is the first clue. But the real trick isn't the ingredients; it's the layout. Industry insiders call this 'menu engineering.' It’s a term coined back in the nineteen eighties by Don Sheridan, but it’s more relevant now than ever as digital ordering becomes dominant. The goal is simple: maximize the contribution margin of each item while subtly nudging the guest toward those specific choices. Luna: Contribution margin? That’s revenue minus variable costs. So they’re highlighting items that cost them little to make but sell for a premium? Lucas: Exactly. And they do this using something called the 'golden triangle.' If you imagine a grid over the center of an open menu, there are three key zones. The top middle, the top right, and the bottom middle. Research shows that guests spend most of their time looking at the top right first. It’s where your eyes naturally land after scanning the header. Operators place their highest margin dishes there. Luna: So if I want the steak, I’m being funneled there? Even if I originally wanted the salad? Lucas: Precisely. And it’s not just placement. It’s the language used to describe those items. We’ve seen studies where adding descriptive adjectives like 'crispy,' 'slow-roasted,' or 'artisanal' increases sales of that dish by up to twenty seven percent. It triggers an emotional response before you even think about the price tag. Luna: That feels manipulative. Like they’re hacking my hunger with words. Lucas: It is persuasive design, which is a form of manipulation, but it’s also standard retail. Think about how grocery stores place milk at the back of the store. You walk past everything else to get it. Menus do the same thing by hiding low-margin staples and putting the 'stars' in the spotlight. A star is an item with high popularity and high profit. They want you to see that first. Luna: What about the things they don’t want you to order? Do they just disappear? Lucas: They get buried. Items with low profit and low popularity are called 'dogs' in the classic matrix. Operators either remove them entirely or push them to the bottom left corner, where eye-tracking data suggests people stop looking after a few seconds. Sometimes they’ll put them next to a much more expensive option to create an anchor effect. If a lobster tail is listed at one hundred dollars, a fifty dollar pasta looks reasonable by comparison. Luna: Anchoring. I remember learning about that in behavioral econ class. It changes the reference point for value. Lucas: Right. And that’s why many modern restaurants have removed currency symbols from their menus. They realized that seeing a dollar sign or even a decimal point triggers pain centers in the brain associated with spending money. By listing prices as plain numbers, like 'forty five' instead of '$45.00', the transaction feels less like a financial loss and more like a consumption metric. Luna: I never noticed the missing dollar signs until you mentioned it. Now I’m checking every menu board. Lucas: You will be. And it goes deeper than text. In digital menus, which are becoming the norm for chains and quick-service spots, they use UI elements to highlight items. Big buttons, bright colors, badges that say 'Chef’s Choice.' These aren’t aesthetic choices; they are conversion optimization tools. Every pixel is tested to see if it drives clicks. Luna: So the 'best seller' badge is just a social proof tactic to reduce decision fatigue? Lucas: Spot on. Decision fatigue is real. When a guest sees too many options, they often default to the path of least resistance, which is usually the pre-selected recommendation. By limiting choices or curating them heavily, restaurants actually improve customer satisfaction while boosting their own margins. It’s a win-win, provided the food is good. Luna: But doesn’t this homogenize the experience? If everyone uses the same psychological tricks, do all menus start to feel the same? Lucas: That’s a valid concern. There is a risk of genericization. However, independent operators who succeed are using these tactics differently. They might use scarcity marketing—listing limited quantities of a special item—to drive urgency. Or they use narrative framing, telling a story about the farmer who grew the vegetables, which adds perceived value beyond the ingredient cost. Luna: Storytelling as a margin booster. That’s clever because it’s hard for competitors to copy instantly. Lucas: Exactly. Data can be copied overnight. A story takes time to build. But here’s the thing about the current market environment in late two thousand twenty six. Labor costs are still sticky, and supply chain volatility means ingredient costs fluctuate wildly. Menu engineering has shifted from a nice to have optimization to a survival mechanism. Restaurants can’t afford to waste space on items that don’t pay the bills. Luna: So it’s not just about selling more steak. It’s about keeping the lights on when margins are thin. Lucas: Always. And we’re seeing a new trend called 'dynamic pricing' in digital menus. Some apps adjust prices based on demand, time of day, or even weather. If it’s raining and soup is popular, the system might slightly raise the price of the chicken noodle soup while lowering the price of the cold salad. It’s micro-optimization at scale. Luna: That sounds incredibly efficient, but also a bit dystopian. Do consumers care if they know the price is changing? Lucas: Most don’t notice unless it’s drastic. But transparency is becoming a brand differentiator. Some boutique cafes are publishing their actual cost-plus markup on their website. It’s a bold move that builds trust, even if it seems counterintuitive to hide profits. It signals to the customer that they are paying for quality, not just arbitrage. Luna: I’d probably eat there just to feel good about the transaction. Trust is a powerful currency in hospitality. Lucas: It is. And that brings us back to the physical menu. Despite the rise of QR codes, many high-end establishments are doubling down on tactile experiences. Heavy paper stock, embossed fonts, leather bindings. Why? Because the act of physically handling a menu slows you down. It creates a ritual. When you slow down, you’re less likely to rush through the options and more likely to engage with the descriptions we talked about earlier. Luna: Slowing down to spend more? That’s the opposite of the quick-service model. Lucas: For fine dining, yes. Speed kills margin there because it reduces engagement with high-ticket items. In fast casual, speed is king, but the menu engineering shifts to bundle promotions. 'Add fries for two dollars more.' It’s a different game, but the principle remains: guide the user to the highest value outcome within their desired speed tier. Luna: So whether I’m in a hurry or lingering, someone is designing the path I take. Lucas: Someone, or something. Algorithms are increasingly involved in determining what appears first on your phone screen. If you order from the same spot repeatedly, the AI learns your preferences and pushes the items you’re likely to buy again. It reinforces habit loops. You end up eating the same four things because the menu is personalized to your past behavior. Luna: That explains why I keep ordering the same spicy tuna roll even when I want to try something new. Lucas: Welcome to the algorithmic age of dining. But here’s the flip side. Personalization can also introduce discovery. If the system knows you love adventurous flavors, it might highlight a lesser-known dish from the chef’s tasting menu. Used ethically, tech can expand your palate rather than restrict it. Luna: I hope my local spot uses it that way. Otherwise, I’m stuck in a culinary echo chamber. Lucas: Let’s hope so. The best restaurants use these tools to enhance the human connection, not replace it. The menu is the bridge between the kitchen’s creativity and the diner’s appetite. Understanding how that bridge is built makes you a smarter consumer and a better operator. Luna: And it makes you appreciate the craft behind the plate even more. Next time I sit down, I’ll be looking at the top right corner first. Lucas: Do it. And see if you still order the same thing. Or if you find yourself drawn to the hidden gems the engineers tried to bury. Luna: I might just order the dessert anyway, knowing full well it’s in the golden triangle. Lucas: Fair enough. But at least you’ll know why.