Menu change v. mathematics

A menu change may not be the method to weather tough economic times—sometimes one must do math.

With clouds on the economic horizon and tougher sailing ahead, it’s a virtual certainty that some of my favorite restaurants are about to spring a leak. I don’t know quite how the cerebral wiring that produces a gifted palate so frequently manages to short out the part of the brain that calculates food costs, but there you are. We’ve all seen it. And I live in fear that a few more great places will look up from their brilliant menus to notice that the striped bass are no longer just on the plates; they’re swimming through the dining room and nibbling at the garnishes as they float by.

Inevitably, I will be getting calls from people who have decided that the best survival strategy is a menu change, and inevitably, they will be dumbfounded when I ask my first question: Why bother?

This always gets ‘em. Some folks think that I make a living from changing menus and developing recipes. Not true. My business is in helping food businesses make a profit. Sometimes it involves a menu change, sometimes it just involves math.

So let’s begin this exciting new exploration of menu development with some dreary drudgework. Your mama would tell you that before you go changing the direction of your life, you need to have a clear idea of where you are now and where you’re heading (and what you want from life and who you married, but we’ll leave that alone). So step back from the business before you do anything hasty, and take a long look at it.

The two kinds of self-review that are helpful about now are a numbers review and a customer review. First, burrow into those numbers. You will, of course, need to have a clear idea of the general categories, like food and labor cost percentages, margin contribution and so forth—the fact that they are restaurant clichés does not mean that they aren’t essential. But it helps to go a little deeper.

Graph each item’s sales over a good period—at least a month—and look at their sales compared to another month. Changes? Trends? Then have your POS system put them into categories, like “appetizers” and “specials,” and aggregate them into unit sales and dollar sales that you can watch on a graph. Is a particular item or category making money for you at a particular time of day, or day of the week? Can you see areas of your menu that are underperforming at certain times? Do appetizer sales and bar sales track one another the way you expect?

If your POS system didn’t come with any software that’ll turn numbers into pictures, you might want to go out and get some. I find that most people are comfortable with visual representations of data (bar graphs, pie charts), and it makes it easy to see what’s selling when, and what percentage of sales each item represents. Then you might look at what items represent what percentage of your food costs, and do a little comparing. Got a high-cost item that represents a small percentage of sales? Why keep it?

Well, I can think of a couple of answers to that. The analysis is incomplete at this point: You haven’t looked at your labor. It might be a cinch to make: freezer to fryer to plate with a dip you use on four other items and a lemon wedge for garnish. It might have a lovely contribution to margin, it might be part of a team of signature items, it might sell beer by the bucket, and—something we’ll look at more in the future—it might be something adored by an important group of customers.

Okay, you still need your labor picture for this item. You don’t have to do what General Mills did back during the Bringer’s era—timing each cook through each recipe three times, and averaging out the times to get an exact labor cost for each item—but you need at least an educated guess at the labor involved in every single thing your kitchen sells. Add it to your food cost—which you have figured out for all the stuff on the menu to the tenth of a penny—and you know how much each item costs you in real money. This way, if some salesman shows you a value-added product and says it’ll save you a lot of dough, you can say immediately whether it will or won’t. More importantly, you know what’s tying up your production and, when you compare it to sales, whether it’s worth it.

Now you’ve achieved a math-y self portrait which has information on everything on your menu. Strengths and weaknesses should be standing out in relief, but before you do anything on the suggestion of the numbers, check with your customers to see if they agree. We’ll talk about that next.