How do you use menu mix analysis to identify and eliminate menu items that are not performing well?

2 How to classify your menu items?

To classify your menu items, you need to calculate the average popularity and profitability of your entire menu and use them as benchmarks. You can then compare each item to these benchmarks and assign them to one of four categories. Stars are items with high popularity and high profitability, making them your best sellers and most profitable items. You should promote and highlight these items on your menu and ensure they are always available and consistent in quality. Plowhorses are items with high popularity but low profitability; they are volume drivers but not profit makers. To improve their profitability, consider increasing their prices or reducing their food costs, or use them as loss leaders to attract customers and upsell other items. Puzzles have low popularity but high profitability, making them hidden gems but not crowd pleasers. Increase their sales by improving visibility, presentation, or description on the menu, or by offering discounts, specials, or bundles. Dogs have low popularity and low profitability; they are worst performers and money losers. Eliminate or replace these items with more appealing and profitable ones, or rework them to fit into another category.

3 How to conduct menu mix analysis?

In order to conduct menu mix analysis, you need to collect and analyze data on menu sales and food costs over a certain period of time, such as a week, month, or season. To do this, you can use a spreadsheet or software program. The basic steps include: listing all menu items and their selling prices; calculating the food cost of each item by adding up the costs of the ingredients used to prepare it; subtracting the food cost from the selling price to calculate the contribution margin of each item; adding up the sales and contribution margins of all items to calculate total sales and total contribution margin; dividing total sales and total contribution margin by number of items to calculate average popularity and average profitability; comparing each item's popularity and profitability to average popularity and profitability, assigning them to one of four categories; and plotting each item on a matrix with popularity on x-axis and profitability on y-axis, labeling them with their category.

4 How to use menu mix analysis results?

Once you have classified your menu items and plotted them on a matrix, you can use the results to make informed decisions about your menu strategy. Focus on your stars and plowhorses, as they account for most of your sales and revenue. Make sure they are well positioned, priced, and marketed on your menu, and maintain their quality and availability. Experiment with puzzles and dogs, as they offer opportunities for improvement and innovation. Try to convert puzzles into stars by increasing their sales, or convert dogs into plowhorses by increasing their profitability. Monitor and update your menu mix analysis regularly, as customer preferences or other factors may cause changes in menu performance. Keep track of the changes and adjust your strategy accordingly.