February 4, 2013 |

2010 August: A Pizza My Mind

By Dave Ostrander

2010 August: A Pizza My MindBeauty lies in the bottom line. Simply put, beautiful menus are money-making menus. All the rest are money losers.

What kind of menu do you have and how do you know? Let’s slice and dice a typical pizzeria menu. Profitability should be the deciding factor on all future decisions. This exercise will lean on the logical rather than the emotional side of the brain. This may be a painful exercise, but I assure you your new menu will be a money maker.

Several years ago I made a house call to a client in downtown Detroit. After introductions and a quick tour, I picked up a carry out menu. It was a full sheet folded in half, printed off a copier. There was almost zero white space, no descriptions or photos. It was black ink on beige paper that offered four or five kinds of fish, French fries, and 25 sub sandwiches. On top of this were huge pasta and pizza selections. I watched the crew at this pizzeria root through an upright two-door freezer for the right kind of fi sh and fries for a dinner.

I dug out my trusty highlighter and asked the owner to line out any entrees that didn’t sell at least three units a day or were a pain to cook. In 10 minutes we shaved off about half of his slow movers.

I told him how my own menu crept up once. If a customer or I loved an entrée, it was in the next print. I told him how I had to eventually axe my favorite Seafood Pizza.

After I did my first POS report on Menu Mix, it became crystal clear that another three pizzas and half of my sandwiches needed to go as well. I gave the probationary entrees three more months to raise unit sales, then ran another Menu Mix along with a menu engineering report. Menu engineering is a computerized or manual tool that ranks all entrees based on profitability and popularity. Sure, food cost percentage is important — but you can’t take it to the bank. A much more critical number is Contribution Margin (CM). CM is defined as the money that is left over after you have paid for the food and disposables for each and every menu component. This is the stuff that all expenses are paid from as well as where the profit comes from.

Anyway, after my client in Detroit cut his menu, his average delivery time improved by nine minutes. Additionally, the morale in the kitchen soared now that they didn’t have to dig and root for ingredients.
My takeaway thoughts?
? Capture the units sold per month report data from your POS system (or manually if you are handwriting guest checks). Black and white doesn’t lie. You probably know in your gut what entrees are dogs, but it’s good to see the reports.
? Perform a menu engineering study on your menu. Make decisions with your head, not your heart.
? Have your menus and fliers designed and printed professionally.
? The most profitable menus are lean and mean.
? If you can’t sell more units, sell smarter. Position and describe your stars so they account for higher sales.
? Loosen the grip on food cost percent. It’s only half of the profitability equation. ?

Big Dave Ostrander owned a highly successful independent pizzeria before becoming a consultant, speaker and internationally sought-after trainer. He is a monthly contributor to Pizza Today and leads seminars on operational topics for the family of Pizza Expo tradeshows.