Menu Engineering Dashboards
Avero's Item Sales Report, similar to a PMIX or Product Mix Report, shows all the sales at an item level, and our unique Report Generator allows you to mix and match the metrics you need to make decisions in your restaurant.
This article outlines how to use our Item Sales Report for Menu Engineering, and how to create a Menu Engineering Dashboard.
In this article:
- What is Menu Engineering?
- Before you start
- How to run an Item Sales Report
- Metrics to select for Menu Engineering
- Creating a Menu Engineering Dashboard
- How to read an Item Sales Report for Menu Engineering. What actions can you take?
What is Menu Engineering?
Menu engineering is using the popularity and profitability of individual menu items to make strategic decisions about pricing, menu content, sales strategies, and more. Using the data already at your fingertips in Avero you can quantify customer preferences to drive revenue while protecting profit.
Before you start
Cost information is not universally available. Avero is only able to import and read the item cost information from some POS systems. The cost information must be entered into your POS, it cannot be entered directly into Avero, so make sure the category you want to analyze has this information populated!
The following POS Systems do not supply cost information:
How to run an Item Sales Report
See our complete How-To guide on this report: Item Sales Report
- Navigate to Sales > Item Sales
- Set the parameters in the Report Generator:
- Business - if you have access to multiple businesses, select the one you want to run menu engineering for. We do not recommend running this program from Group reports, because this is about detail on a single menu.
- Date - Be sure to select a dynamic date if you are setting up a dashboard or emailed report! Larger time periods work best for menu engineering to minimize outliers and get a true picture of customer activity. We recommend at least a full month, or a full quarter.
- Revenue Center - You'll want to compare apples to apples, so avoid mixing Private Dining or Banquets with Dining Room. Depending on how different the menus and customer behavior are, you will probably want to run your Bar separately from you Dining Room.
- Order Type - Are to-go habits different than dine-in? You betcha! Narrow your focus to where you generate the most revenue to have the biggest impact.
- Category - Select the category you want to dive into, you can pick a wide category such as 'Food' or get very detailed such as 'Draft Beer' if you want to make a change to that section of the menu. Run Menu Engineering for both food and beverage!
Metrics to select for Menu Engineering
The main metrics that impact menu engineering are popularity and profitability. We want to know how popular an item is (customers order frequently) - these are the things that sell themselves and customers will order frequently! We also want to know the contribution margin - the is how much profit this item is contributing to your bottom line, which is determined by subtracting the item cost from the item price (don't worry, Avero does this for you!). The goal is to create a balanced menu of popular and profitable items and avoid problems and profit drainers!
For popularity - select Item/Cover % or Item/Check%
Item/Cover % is how popular a menu item is with individual customers. For every guest in your restaurant, how often is this item ordered?
Item/Check % is how popular a menu item is with tables (checks). Some things an individual guest orders, like a salad or a glass of Chardonnay but some things are ordered for the table, such as a bottle of wine or a cheese board. For items that are usually ordered by the table/check or if your restaurant does track guest counts, use Item/Check %. For all other items, use Item/Cover %.
For profitability - use Avg Item Profit or Total Profit
Report parameters and metrics are selected, hit go!
Avero will generate a table with all your selected metrics and a visualization that will allow you to toggle between categories and metrics.
For the visual, set your Vertical Axis to Profitability and your Horizontal Axis to Popularity. Items higher up in the graph are generating more profit and items farther to the right on the graph are the more popular items. At the top, you can select between the categories you included in the report.
Creating a Menu Engineering Dashboard
See our complete How-To guide on creating dashboards: Creating & Managing Dashboards
Set your Vertical Axis to Profitability and your Horizontal Axis to Popularity. Items higher up in the graph are generating more profit and items farther to the right on the graph are the more popular items. At the top, you can select between the categories you included in the report.
Then use the speedometer to name the graph and save it to a dashboard. If you already have a menu engineering dashboard set up for this outlet, assign to that or select Create New and name your new dashboard.
How to read an Item Sales Report for Menu Engineering. What actions can you take?
Menu Engineering usually divides your graph into four categories indicating which items should be kept, which should go, and which can be adjusted to improve. First, we will describe the categories then provide examples of actions that could be taken. Get creative!
The four quadrants are named some variation of:
Top Right - The STAR
These are items that are to the right-hand side of the graph in the upper half. These are items that are very profitable and very popular. Guests order them often and they make you money. Keep these!
Bottom Right - The PLOWHORSE
On the right-hand half of the graph are items that are very popular - your restaurant might be known for them - but they are in the lower half of the graph meaning they aren't contributing much profit. These are menu items that might need adjustment in portion size or pricing to increase their contribution.
I don't want to mess with my popular items: take a look at what makes your item popular and don't change that. Do people love it because it is tasty? Keep the recipe the same but raise the price a dollar, it will still be very popular but now add more to the bottom line. Do people love it because it is inexpensive? Don't touch the price, but perhaps adjust the portion size so the item cost is lower. Do people order it because it is in the center of the menu, at the top of the list or in a 'Specials' section? Consider moving it mid-list and giving the prominent placement to a Puzzle item instead.
Top Left - The PUZZLE
These items are in the upper half of the graph, meaning they are good at contributing profit like the STARs but they aren't as popular with your guests. These are menu items you should look at adjusting!
Why make changes to profitable items?
Profitability is great, but items that are infrequently or rarely ordered lead to wasted product, inefficient prepping, and wasted menu space. Try to figure out why these items aren't more popular.
What kinds of changes can be made to increase popularity?
Forget everything you know about running a restaurant and look at your printed and online menu as someone trying to order dinner. Sometimes it is as simple as these items are on a lost place in the menu - hidden in the middle of a list or at the bottom right, consider moving the item to a more prominent spot, changing the name, or adding a menu call out such as a frame or a box around the item.
Of course, there is also he good old-fashioned sales contest for staff. Ask them about the item and why guests don't order it more often, maybe the portion size is too small or too large for most customers, or servers don't sell it because it comes on the heaviest plate. All of these are real reasons we have seen for items lagging in popularity!
Bottom Left - The DOG
These items are not very popular and don't contribute much to profit. Products in this section are chief contributors to wasted time and product. Ordering supplies for items that aren't ordered, wasted time prepping the mise en place for these dishes, and a busier menu for including them.
Should I just cut all the Dogs from my menu?
Not necessarily, though removing these items is an option. Can they be adjusted to make them more profitable or more popular? Try adjusting portion sizes, switching out the garnish, or adding something your customers love.