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Understanding the difference between popularity and profitability of menu items is key in raising the restaurant profit margin.

If costing your menu was a prequel to the cinematic epic that is menu engineering, then your first scene should open with menu categorisation. Menu engineering is the study of the profitability and popularity of menu items, and how these two factors influence the placement of those items. This applies to both paper and digital menus. If you suspect that your menu items can generate varying levels of profitability, then menu engineering will certainly help in increasing your profits.

Split your menu into categories that fit your restaurant, ensuring that there’s no overlap between menu items in various categories. Further divide your menu categories (“Appetisers”, “Mains”, and “Desserts”) into sections. For example, “Pasta” can be further split into “Seafood Pasta”, “Meat Pasta”, and “Vegetarian Pasta”. The same rule to keep in mind here is that no menu item should overlap into different sections.

After you’ve broken your menu into sections, create a profitability-popularity matrix with a simple spreadsheet listing the menu items beneath each category and section. Using data from the most recent time period (preferably the previous month’s), place each menu item into one of the following four quadrants. After placing your menu items within the profit and popularity, assess what to do with each of them on the category and section levels, and determine which action to take based on what each quadrant of the matrix signifies:

  • Stars: Popular and profitable items. The goal is for each of your menu items to be stars and maintain them as such.
  • Horse: Popular menu items that don’t generate the desired profitability. Consider pairing them up with complementary items that are more profitable.
  • Puzzle: Unpopular menu items that are profitable. It could be one of two likely issues: One, these items do not fit well with your diners’ taste preferences; or two, your servers are not pushing these items enough. Consider lowering the prices to test if an increase in popularity will garner an increase in profits.
  • Dog: Your least significant menu items. You may consider omitting these altogether if they are not your restaurant’s basic staples. One course of action that you could consider is to stop any further promotion of such items. The effort and money needed to convert these items into stars could be put to better use elsewhere.

Beginning with the category level will allow you to determine which area of the menu that category should sit in. Subsequently, you should proceed to analyse menu items at the section level — this allows you to place individual menu items in their respective categories.

Once you’ve completed categorising your menu, head to the next step of Menu Engineering: Dividing your menu into categories and sections.

Want to make menu engineering work for your restaurant? Learn about our Chope products, and subscribe to Chope For Restaurants for tips on how to ace the restaurant business.


Henrik Chan

Henrik Chan has cut his teeth working as a B2B content marketer at Chope, connecting restaurants in Asia to resources and solutions. Finding joy in sports and film, he is Chope’s go-to critic on topics that range from Arsenal’s lineups to Christopher Nolan’s posse of performers.


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