Discover the secret recipe for maximizing your casual dining restaurant’s profitability with menu engineering! Unveil the power of categorizing menu items into stars, plow horses, puzzles, and dogs based on popularity and profitability. This is not it. There’s a surprising real-life case study of Chili’s that will blow your mind. Read more to find out Chili’s witnessed an increase in profits by using menu engineering.
What is Menu Engineering?
Menu engineering is a process that you can use to analyze the items in your menu based on popularity and profitability. By categorizing menu items into four quadrants based on these 2 criteria, you can identify which items are stars, plow horses, puzzles, or dogs.
Stars: High-profit, high-popularity items that you should highlight.
Plow Horses: High-popularity but low-profit items that attract customers but offer lesser financial profit.
Puzzles: High-profit but low-popularity items. You can improve the visibility of these items by using the right marketing strategies.
Dogs: Low-profit, low-popularity items that you scrap from your menu immediately.
Chili’s Case Study
An example of a Casual dining Restaurant that has used Menu Engineering to increase its profitability includes Chili’s. Chili’s was facing a lot of issues like not being able to stay competitive in the restaurant industry, not being able to generate more revenue and not satisfying the customers. A lot of low-profit items were also pulling the restaurant down and their menu needed an update. They had the option of choosing menu engineering to give their menu a makeover and they exactly did that.
This restaurant analyzed the sales data and identified the top-performing items from the menu based on profitability and popularity.
Strategic Adjustments
Certain items from their menu like baby back ribs and fajitas were popular and profitable at the same time. So they categorized it as Stars.
Some Appetizers and desserts from their menu were popular but they had a low profit margin. So they categorized it as Plow horses.
Chili’s regularly introduced new items and gave seasonal discounts to retain them. They started keeping healthier options on their menu to cater to health-conscious customers.
The restaurant changed the menu layout to highlight the star items and improved its marketing efforts for plowhorses.
Results
The restaurant was able to improve customer satisfaction and increase its profits by 6.1%.
Star items like baby back ribs and fajitas continued to shine on the menu and drove sales.
Plow horse items saw increased profitability through pricing and adjusted portion sizes.
In conclusion, menu engineering is a great option for you if you are looking to increase your profits. By gathering the insights gained from categorizing menu items into stars, plow horses, puzzles, and dogs, you can make informed decisions to improve the menu. The success story of Chili’s Grill & Bar is an inspiration for other casual dining restaurants. The restaurant turned the tables by introducing some strategic changes in the restaurant and witnessed a 6.1% increase in profits. Chili’s showed the transformative power of menu engineering in driving sales and increasing profits. Tell us in the comments below about your experience if you’ve used this already in your restaurant. If you haven’t then what are you waiting for? Try this ASAP and reach the heights.
