Guest Blog from Sales Manager, Clive Keywood, Comtrex Systems.

 

An effective menu is one of the best tools that any restaurant has when it comes to engaging customers and enhancing profitability.  For example, the right menu layout and design can increase profit by up to 5%. Creating a menu that will optimise your business’ potential for profit isn’t a question of guesswork – it requires the insight and knowledge that only menu engineering can add to the process.

 

What is Menu Engineering?

Essentially, it’s a process of evaluating menu pricing – both today and in the future – and using insights drawn from data about your business to create the right design and content. It can be effective in terms of helping to steer customers towards the decisions that you want them to make about your menu and helping to ensure that the menu items that generate the most profit for your business get picked. It’s a tool that can benefit every restaurant, no matter what your cuisine or target audience.

 

Using Menu Engineering Effectively

How often do you want to change your menu? Menus change frequently for many businesses and it’s essential to use the tools of menu engineering each time you update a menu if you want them to be effective. So, the first step is to be honest about how often you’ll have time to go through the process e.g. once or twice a year.

What’s the food cost for every item on the menu? It’s key to start with this data. You can work it out by adding the cost of each ingredient to the purchasing cost and dividing this by the number of portions it will make.

How profitable is each dish? You can calculate this by taking the food cost from the sales price. Another key metric that can be useful is food cost percentage (which will show you if dishes are correctly priced) – this is worked out by dividing food cost by menu price e.g. a £5 dish with a food cost of £1 will have a food cost percentage of 20%.

How popular is each dish? This is often easiest represented on a menu engineering matrix with one axis showing the number of times the dish was sold within a timeframe and the other its contribution margin (the difference between the selling price and the item cost).

What do your customers think? Often, the most effective way to evaluate menu performance is to ask those who are using it – what do they order, do they like the menu, what else drives them to the restaurant and what changes would they suggest?

 

Creating a New Menu

Using the data you now have you can engineer your menu to make it more effective, for example:

Using visual clues and highlighting colours to direct customers towards the dishes you know are the most profitable for you based on food cost, profit per dish etc.

Improve your descriptions – descriptive menu items are chosen 27% more than those that don’t include much information. Apply the most detail to the dishes you want to sell more of.

Consider two portion sizes. Depending on the costs of each dish it can advantageous to offer a smaller size dish, as customers often assume this is better value but may actually be more profitable for you.

Use the ‘golden triangle.’ When reading a menu we generally look at the centre first then our eyes move to the right and then the left. Bear this in mind in terms of where you place the items you most want customers to focus on

Once you’ve taken the time to engineer your menu it’s essential to track the progress to see whether your assessments have been correct. This will help you to evolve the process of menu engineering for greater profitability over time.

Find more about our menu management system.

On average, one in five diners fail to turn up for their reservations in big cities, with costs estimated to be around £16 billion a year to the pub and restaurant sector. What’s interesting to note, however, is that it is repeatedly reported that many consumers are not aware of the consequences of not showing up for a pre-booked table, and secondly have not considered it would be polite to notify the restaurant if they are unable to make the reservation.

But why are consumers failing or reluctant to cancel their table booking?

Recent research found the following:

• 45% don’t cancel because finding cancellation information is difficult.
• 27% don’t cancel because they can’t be bothered.
• 18% don’t cancel because they have forgotten about their reservation.
• 9% don’t cancel because they book multiple restaurants and decide to commit to a restaurant closer the time.

This is a huge problem in the hospitality industry and can have a huge and sometimes disastrous impact on your business as cited by Restaurant Mark Greenway last year on Big Hospitality online. 

Firstly, there is disappointment that the table has gone to waste when another customer may have been turned away due to table availability, resulting in you losing profit. Next, is the cumulative cost of potential overstaffing to the number of bookings and the food that has been prepared that has been ordered and prepared.

If no-shows are a re-occurring problem for your hospitality venue and you’re worried about the impact it will have this festive period, don’t panic! Here are four useful tactics that could help reduce your no-shows and boost profitability within your venue this festive period.

1. Do you have an official booking policy?

You may have a range of policies floating around that you would like your diners to comply with when dining at your venue. But you might not realise that you can set up an official festive booking policy for table reservations that lay out the terms and conditions of booking at your venue – specifically around Christmas and New Year. This list of terms and conditions that people must agree to before making a reservation means that your customers must stick to them, giving you more control over your table bookings. These terms and conditions could include the following:

1. All the different channels on which bookings can be made e.g. through your booking widget on your website or your telephone booking system.
2. Whether reservations are necessary, or walk-ins are acceptable.
3. How far in advance a table reservation should be made.
4. How long you are willing to wait before declaring a no-show (15 minutes is acceptable according to The National Restaurant Association of America).
5. A cancellation fee (to be determined by you) applies if not enough notice is given

2. Do you take deposits for reservations?

In a recent study of UK restaurants, 42% were reported to be already taking or holding deposits as part of their booking policy to help tackle no-shows – in particular during Christmas Day and Valentine’s Day. And according to GO Technology, a quarter of consumers would like to be able to access online bookings with deposits.

Consider taking pre-paid deposits that can be redeemed at the time of paying the bill. This way, festive bookers are more willing to show up for their reservations and could end up spending more because they’ve already got what seems like money off.

Tip: Make sure your booking system is PCI (payment card industry) compliant, so your customers’ data is always processed correctly and securely. Zonal Bookings already ensures this!

3. Do you send out SMS reminders and emails?

After a reservation is made, sending an automated confirmation email or text can go a long way, as diners with smartphones can add these into their calendars, often reminding them of their pre-booking. Using an intelligent table reservations system such as Zonal Bookings, gives customers the flexibility to cancel their reservation via SMS allowing venues to free up their tables to be resold. With the average open rate for SMS being 82%, sending reminders 48 hours before a reservation can have a huge impact on minimising no-shows for those who are forgetful or want to make amendments to their booking.

 

4. Do you run waitlists for queuing diners to fill no-show table bookings?

There’s nothing worse than turning away diners waiting for a table because you’re fully booked, only for your pre-booked tables to no-show. This causes lost revenue, empty tables and unhappy customers, when those tables could have been occupied by your walk-ins. That’s why having the right table management solution such as Zonal Bookings for running a waitlist, with precise wait times for queuing customers could help reduce that lost revenue. Combined with your policy for cut-off times for no-shows, you could be filling your no-show tables in no time!

The issue of climate change and the call for action is making unprecedented headlines around the world.

The hospitality sector is not immune from this pressure to act and reduce its entire waste footprint, from energy and packaging, to food and deliveries.

Sustainability is not simply about swapping plastic straws for paper ones though; it needs to run through the DNA of the entire business.  And the changes don’t have to be big to have an impact, it’s the small incremental changes that, when added together, have a positive effect.

Taking food waste as an example, the total amount of avoidable food wasted in the UK every year from the hospitality sector is one million tonnes (source: WRAP).  In total, businesses throw away food worth an estimated £5bn –a significant sum of money to be literally chucking in the dustbin.

And let’s not forget that leading the sustainability march is the influential Generation Z, aged up to 24 years old.  That’s the same Gen Z that makes up a large proportion of the hospitality industry’s front line workforce.  By giving them the right tools, you are empowering them to deliver the company’s sustainability targets and win their hearts and minds at the same time.  Highly engaged employees are 87% less likely to leave their companies than their less engaged counterparts (Source: Corporate Leadership Council).

Stock, recipe and menu management is the simplest – and arguably the best – way to reduce food waste, food miles and food packaging.  And this is where technology comes into its own.

Through a complete stock and menu management system, operators can produce creative, comprehensive and accurately costed menus as well as store, manipulate and utilise critical information including ingredients, allergens, prices, recipes and supplier details.

Using a Menu Management tool to control the portion size, ingredients and cost of a dish, doesn’t just make sense from a commercial perspective, but makes an invaluable contribution to sustainability objectives too.   Menu composition analysis, based on actual historical sales data to forecast the volumes, revenue and profitability of a planned menu becomes easy.  But best of all, when this information is hooked up to your purchasing platform you can move from ordering ‘Just in Case’ to ‘Just in Time’.  Optimising stock holding and automatically avoiding costly and, more importantly, wasteful over ordering becomes a piece of cake.

Put simply, the more accurately you can plan and forecast your menu performance, the more accurately you can order. Not ending up with superfluous perishable goods is a sure fire way of avoiding waste.

A truly integrated system also saves hours, with a single point of data entry which will then flow through recipes, menus, stocks and EPoS, to purchasing and invoice reconciliation.  Change data once and it updates everywhere, giving everyone the real time, accurate information they need to optimise their operation and minimise their waste – instantly.

This in turn gives the power and confidence to adapt and react rapidly to market conditions and changing customer demands.  Switching an ingredient or dish on a menu, for instance to make use of seasonal or more locally sourced ingredients, becomes an operational reality, not just an ambition.  In a few clicks of a mouse , it moves it from the ‘nice to have but too difficult’ pile to ‘no brainer’.  And once again, the commercial needs of the business and the sustainability expectations of both customers and staff alike are fulfilled.

I saw evidence of this in action on a menu recently, where a high street casual dining brand was offering smaller plates, for smaller appetites.  There wasn’t much of a cost incentive, so the margins were going to be very good, wastage would be reduced, and the customer would have their needs better met.

For hospitality it’s never been easier to contribute meaningfully to sustainability targets by using readily available tech with common sense and a commitment to make a difference – on every level.

This kind of smart approach will not only contribute to financial targets, but will enhance ethical credentials too – essential for building brand loyalty and earning confidence, respect and credibility with employees, customers and investors alike.

By Zonal’s director of online commerce, Helen McMillan

With negative reviews given about food quality soaring by 10% (an increase from 8% to 18%) between February and September this year, it is unsurprising that food expectations are the number one grievance for consumers in pubs and bars.

However, according to the latest data from guest feedback service Feed It Back, speed of service remains the second top gripe, with 17% of negative reviews relating to poor speed of service, despite a 4% fall from February.

Feed It Back chief executive Carlo Platia said “The really interesting part is when you dig down into the granular detail of the data and find out that it’s actually the wait time between the starter and the main course that is frustrating customers. With this richness of insight, you have the tangible information you need to improve your customer experience.”.

Our GO Technology Report produced in conjunction with CGA, which polls 5,000 UK adults, backs up these stats, reporting that customers put swift service and convenience at the top of their list of priorities, with 72% of those surveyed claiming food not coming fast enough as their number 1 frustration.  With nearly half of customers wanting more speed when it comes to food orders arriving on time, it’s a complaint common to all age groups, particularly at lunchtimes, when many are watching the clock and every second counts.

This is where integrated systems really come into their own, because they can get serving and kitchen staff working in harmony to give customers what they want: good food, served quickly and accurately.

To reduce this frustration, technology can help ensure orders are taken correctly, processed accurately and arrive in the kitchen efficiently. Zonal has developed a number of solutions to tackle these issues.

When it comes to taking orders quickly and accurately, iServe, is a cost-effective replacement to the traditional order pad, which can be installed on any Apple iOS device to create a mobile EPoS app.  Team members can take orders and print and process payments from anywhere in the venue, without the need to return to the POS.

With iServe, orders are processed faster with staff visits to the bar and kitchen reduced, giving the team more time to focus on delivering a great customer experience. iServe can also drive spend per head through upsell prompts and links with Zonal’s online booking and table Management and loyalty systems to deliver a truly integrated solution.

Once the order has been taken, Zonal’s comprehensive kitchen and service management solution provides visible real-time information to both kitchen and service staff. It removes the risk of delays in the kitchen and poor communication between waiting and kitchen teams, which can be a cause of frustration for consumers.

There is no doubt that technology, driven by consumer demand, is transforming the hospitality industry, and the key to success is integration. In order to overcome issues such as speed of service, operators need to embrace change and unify their systems, automate everyday interactions, allowing them to extend their competitive advantage.

You can read more on the topic of speed of service in our GO Technology ‘The Need for Speed’ report. Download now.

Hospitality and Catering News, the essential information resource for those working within the industry, has called for operators to adopt Click and Collect in a recent article posted online.

Citing Zonal’s recent GO Technology Research to emphasise the size of the Click and Collect opportunity, Hospitality and Catering News highlighted how this small but rapidly growing new revenue stream is becoming big business for the hospitality industry – thanks to the increase in web-based ordering and delivery services such as Zonal’s Click and Collect solution.

The facts speak for themselves – with Delivery providers such as Deliveroo and Uber Eats among those reporting 755 million food deliveries made last year, an increase by 39% within the last three years, eating out of the home is here to stay.

But here’s the good news about Click and Collect according to Hospitality and Catering News, and some of the top reasons you should be joining the party:

• Unlike many of the major food delivery companies which charge up to 20% commission per order, Click and Collect won’t erode your margins.
• Click and collect can improve footfall, as it’s an opportunity to showcase your venue’s unique services and product offering whilst building brand loyalty.
• Click and collect brings convenience to the customer and enables the business to be more efficient.

To read the full article with more detailed top tips and suggestions about building a Click and Collect strategy, visit Hospitality and Catering News.

If anyone wants proof that climate change is real, they need look no further than recent UK weather events.  From one extreme to the other – sunshine and sandals to driving wind and snow!

We all have a responsibility to care for our planet, and the foodservice industry isn’t exempt.  The total amount of waste, including food, packaging and other ‘non-food’ waste produced each year by hospitality and food service sector (HaFS) outlets is 2.87 million tonnes.  Of this, 920,000 tonnes of food is wasted at outlets annually – 75% of which is avoidable – costing the sector £2.5 billion per year (source: WRAP).

Progress is being made by the sector, according to a new report by the Sustainable Restaurant, in terms of tackling sustainability issues, but the pace of change is nowhere near fast or widespread enough. The facts are that if the foodservice industry reduced food waste by one quarter, it could cut its carbon emissions by almost one million tonnes a year.

That may sound like a tall order, but an obvious way that everyone can contribute is by avoiding waste in the first place.  By simply doing what you should be doing for the good of your margin – running a tight ship and getting your stock and order processes right – you will help the planet.  It doesn’t require huge investment or change, it just requires a little extra focus and effort on many of the systems and processes you already have.

It may not be new, but the difference that can be made by making small incremental improvements in your stock & order process can be exciting.  Sustainability benefits can be achieved in terms of reducing packaging, food waste and CO₂ omissions, to name just a few.  And when combined, these incremental savings stack up to not only make a significant contribution to the bottom line, but also to the corporate and social responsibility (CSR) objectives your customers increasingly expect of you.

A key fundamental to becoming a sustainable business, is having access to real time data on purchase volumes and stock levels, together with the ability to control the purchasing of every outlet.  For example, if you can design a menu that considers the carbon footprint of its products, coupled with minimising the risk of waste through stock control, kitchen management and portion sizes, then you will be doing your bit for the planet.

If we look at animal agriculture, it contributes to about 14.5% of the world’s greenhouse gases, of which 65% comes from beef and dairy cattle, giving it a hefty carbon footprint. Cows also produce methane gas which is a harmful greenhouse gas. In many countries, deforestation to clear land for cattle is also contributing to climate change.  By reducing the number of beef options on the menu and sourcing responsibly, you can help achieve the cumulative gains required to make a big difference.

There are also ‘throw-away’ ingredients such as tinned tomatoes and baked beans, that are low value and may be considered okay to waste.  However, by being more careful you could significantly reduce packaging waste and do your bit for the planet, be that by avoiding landfill or incineration.

Taking control of your stock and order processes not only means you will be contributing to your environmental goals; but you’ll be adding to your bottom line through marginal gains.  When consistently implemented, we have seen improvements on margins ranging from anything between 3 to 8%.

Being both environmentally and financially savvy is something we all need to grapple with, but it’s not rocket science.  Knowing that the ‘boring stuff’ – comprehensive systems, underpinned by solid process, delivering accurate, timely information, that is constantly reviewed and regarded – is the foundation for success.

Operators owe it to themselves to get these fundamentals right, but there is a far greater environmental goal which they must also play a part in delivering. It’s a whole new way of thinking about the importance of getting often regarded difficult and dull processes in place – a way which should inspire and engage everyone – from the board room to the back office, the big budget party organiser to the Friday night regulars.

We need to open our eyes and have a detailed picture of all our operations in order to manage costs effectively from utilities to ingredients to people.  Never has it been easier to paint this picture through integrated technology, so that data can be aggregated quickly to create real-time data analysis and comprehensive reporting in an easy to understand format.

In our brave new world, it’s about having the right level of detail to make sure sustainability counts.

Improving your hospitality venue’s profits doesn’t just come down to the food and drink you serve: the experience you deliver is just as important.