Latest / Restaurant Business with Fexingo: Food Service, Hospitality, and Independent Operators / The Menu Engineering Secret That Boosts Margins
Transcript
- Lucas: Let’s talk about the single most expensive piece of real estate in your restaurant that isn’t on your floor plan. It’s the menu itself. Specifically, the top right corner. You know the spot where eyes naturally land first when you open a printed booklet or glance at a tablet interface? That is prime advertising space, and yet most independent operators leave it vacant or fill it with their worst performers. Luna: It’s funny because I always assume my eye goes straight to the specials box or the chef’s recommendation. Do you have data on where people actually look? Lucas: We do. Eye-tracking studies from Cornell’s Food and Brand Lab show that diners typically scan three main areas: the top right, the center, and then the bottom left. The top right gets the most attention because we read left-to-right, so it’s the first place our gaze settles after the header. If you put your highest margin item there, you’re essentially giving it a free billboard. But most places just list items alphabetically or randomly. Luna: Alphabetical listing is still so common, especially for appetizers. It feels orderly, but it’s terrible for business logic. Lucas: Exactly. Orderly for the manager who typed it up, not optimal for the owner trying to boost margins. This brings us to what’s called menu engineering, a framework popularized in the eighties but still wildly underutilized today. The core idea is simple: you plot every dish on a two-by-two matrix based on two variables. First, how popular is it? Second, how much profit does it generate per plate? Luna: So popularity versus profit. That sounds straightforward enough. Where do the items land if they are both popular and profitable? Lucas: Those are your Stars. High sales, high profit. These are the items you want to keep front and center, maybe even highlight with a small graphic or icon. They are the backbone of your operation. Then you have Plowhorses. These are high sales but low profit. Think of a classic burger at a casual spot that sells like crazy but has thin margins because beef costs fluctuate. Or a house salad that everyone orders but yields pennies. Luna: I’ve definitely been a victim of the Plowhorse effect. I order the same thing every time because I trust it, even if it’s not the best value for the kitchen. Lucas: That’s the trap. For Plowhorses, the strategy is usually price adjustment or portion control. You raise the price slightly, or you reduce the portion size by ten percent while keeping the price steady. It’s subtle enough that most diners won’t notice, but it improves the margin significantly. Now, the tricky quadrant is Puzzles. High profit, but low popularity. These are dishes that make money but nobody orders. Maybe it’s a fancy seafood pasta that requires specific ingredients and sits in the back of the mind. Luna: Why would something be high profit but unpopular? Is it usually priced too high, or just unknown? Lucas: Often both. It might be priced aggressively well, but the name doesn’t entice, or it’s buried in the middle of the page. The goal here is to promote them. Put them in the hot spots—the top right or center. Use descriptive language. Instead of just listing 'Grilled Salmon,' you describe the local source, the preparation method, the flavor profile. Descriptions can increase sales by up to twenty-seven percent according to some hospitality studies. Luna: Descriptive writing is an art form though. There’s a fine line between evocative and overwrought. You don’t want to sound like you’re selling a timeshare. Lucas: Right. And then there’s the Dogs. Low sales, low profit. These are the items that take up prep time, tie up inventory, and rarely move. They are the dead weight. The hard truth is that many owners keep them out of nostalgia or fear of changing the identity of the menu. But they are costing you money in waste and labor. Luna: Removing items feels scary though. People get attached to certain dishes. How do you justify cutting a Dog without losing regulars? Lucas: You test it quietly. You pull the item from the digital menu first, or you stop highlighting it. If no one asks for it, you’re safe. If someone does, you can reintroduce it later or offer it as a daily special to gauge interest without committing to full prep. The key insight here is that a streamlined menu reduces waste and increases efficiency. Fewer SKUs mean less spoilage and faster kitchen throughput. Luna: That makes sense. Less complexity in the kitchen translates directly to lower labor costs during the rush. It’s operational hygiene. Lucas: It is. And speaking of efficiency, let’s pause for a moment to talk about how listeners support this kind of deep-dive analysis. If these conversations have moved your work forward in some small way, consider supporting the show directly. Listener contributions allow us to continue producing ad-free content without relying on algorithmic pressure. You can find us at buy me a coffee dot com slash fexingo. Every bit helps keep the lights on and the research thorough. Luna: Yeah, and it really keeps the quality high. We appreciate anyone who takes a second to chip in. Lucas: Back to the menu. Once you’ve classified your items, you need to think about the physical or digital layout. The top right corner is king, but the center is queen. Studies show that items placed in the center of the page receive more attention than those on the edges. So, you want your Stars and your Promoted Puzzles in those zones. Avoid putting low-margin items next to high-margin ones unless you’re using visual cues to guide the eye away. Luna: Visual cues. Like arrows or boxes? I see those all the time now. Do they actually work or do people just ignore them? Lucas: They work surprisingly well. A simple box around an item or a small icon can draw the eye and increase sales by fifteen to twenty percent. But don’t overdo it. If everything is boxed, nothing is highlighted. Use these cues sparingly for your Star items and your high-priority Puzzles. Also, consider the font size. Larger fonts for high-margin items can subconsciously signal importance. Luna: I never thought about font size affecting perception. It’s such a subtle design element. Does it vary by cuisine type? Lucas: It does. In fine dining, subtlety is key. Large fonts and bright colors might feel tacky. In fast-casual, bold graphics and large text work better because the decision-making process is quicker. Diners in fast-casual environments spend less time analyzing the menu. They scan, decide, and order. So the psychological triggers need to be stronger and faster. Luna: Speed of decision making. That’s another factor. The longer a customer spends looking at the menu, the more likely they are to order dessert or an extra drink. Lucas: True, but only up to a point. If the menu is too complex, they get decision fatigue and stick to what they know. That’s why simplifying the menu structure is crucial. Group items logically. Don’t mix appetizers and entrees. Keep categories distinct. Use clear headings. The easier it is to navigate, the smoother the experience, and the higher the likelihood of upsells later in the meal. Luna: Upsells later in the meal. That’s interesting. So once they’re past the initial menu paralysis, how do you capture that extra revenue? Lucas: By positioning high-margin add-ons strategically. Think about sides, drinks, and desserts. These are often impulse purchases. Place them near the entree descriptions or on a separate card handed out at the table. A glass of wine paired with dinner has a much higher margin than the food itself. Train your staff to suggest these pairings confidently. It’s not pushy; it’s helpful guidance. Luna: Staff training is huge here. A server suggesting a premium cocktail can double the beverage check. But that requires confidence and product knowledge. Lucas: Absolutely. And it starts with the menu itself. If the menu highlights the cocktail with a compelling description and places it in a visible spot, the server has an easier job. It’s a system. The menu sets the stage, the staff delivers the performance, and the customer enjoys the experience. When all three align, profits follow. Luna: It’s really about removing friction. Friction in decision making, friction in ordering, and friction in understanding the value proposition. Lucas: Precisely. Friction kills sales. Clarity drives them. So, as you review your own menus, ask yourself: which items are Stars, which are Plowhorses, which are Puzzles, and which are Dogs? Are they in the right spots? Is the language compelling? And most importantly, are you letting nostalgia dictate your offerings, or is data guiding your decisions? Luna: Data over nostalgia. That’s a tough pill for many passionate chefs to swallow, but it’s the only way to scale sustainably. Lucas: It is. And the good news is that you don’t need a massive budget to implement these changes. Small tweaks in layout, wording, and item selection can yield significant returns. It’s not about reinventing the wheel; it’s about optimizing the rotation. What’s one change you could make to your menu tomorrow that would improve your margin? Luna: Probably moving my best-selling appetizer to the top right and adding a bit more detail to its description. Small steps, big impact. Lucas: Start there. Watch the numbers for a few weeks. You might be surprised by how much those small adjustments shift your bottom line. Thanks for tuning in to Restaurant Business with Fexingo. Keep cooking smart.