Food & Beverage - 3 Fast Ways to Increase Menu Profits - By Ken Burgin
Here's how to increase customer spending and profits as quickly as you can reprint the menu.
It makes sense: New Year = a new look to the menu and a better bottom line!
1. Add profitable price-endings. Do you have flat menu prices? Flat prices end in .00 eg $6.00 or £10.00. Adding .50 or .80 or .90 at the end is easy money just waiting for you - eg $4.00 becomes $4.50 or £12.00 becomes £12.80.
Prices written as 12 or 12.00 seem to be more about cool design rather than profit margins. Not very logical.
Will customers notice? A few will, most won't, and if you sell 100 of the item that's gone up by 80c, it's $80 extra. Sell 1000 and that's $800 toward the wage bill.
2. Move the most profitable items to be first and last in a menu section. The first price in a section will sell more, just because it's first. The last item is also strong position. See the example below.
Once you know the gross profit of each item, make the changes. Sales of both will increase, and the overall profit. The same logic applies to wine and cocktail lists. Everyone has an opinion about menu design - make sure decisions are best for the bottom line.
3. Add an expensive item as a 'decoy price'. Everyone loves value, and you've thought carefully about the top price to charge. Let's say main courses are in the $10-$20 range, with nothing over $22.50. If you added one more item for $28.50, notice how all the other prices look more reasonable? Even if this expensive item doesn't sell, it's still done the work of repositioning value on the menu...and imagine if it did sell well!
Profitable Hospitality offers management and cost-control systems (Manuals & CD-ROMs) for restaurants, cafes, hotels, bars and clubs. The systems are based on the extensive consulting and operating experience of CEO Ken Burgin, and enable busy owners and managers to set up complete operating and cost-control systems in minutes, not months. Profitable Hospitality also runs regular management training workshops in the areas of kitchen profit & efficiency, restaurant marketing and functions management. A free monthly e-newsletter keeps you up to date on the latest industry management issues. www.profitablehospitality.com.
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