You go to a restaurant, get seated, and then you’re handed a book…it’s the restaurant menu. Pages and pages of menu items the restaurant claims to be the best at preparing.
Menu Choice overload
Have you ever seen a restaurant menu with so many items to choose from that you couldn’t decide what to order?
This is called “choice overload” or “analysis paralysis.” What it means is that when there are too many choices, people tend to choose nothing at all.
Choice Overload Study
A few years ago, two marketing professors conducted a study at an upscale grocery store. On the first day of the study, they offered shoppers 24 choices of jam. On the second day of the study, they decreased the choices of jam to six.
Naturally, the large display attracted a lot of attention from curious shoppers. But, when the results of the study were analyzed, they found that only 3% of shoppers who saw the large display actually purchased anything.
Surprisingly, 30% of the shoppers who saw the smaller display ended up buying a jar.
According to the study (and many done since), it seems that when you offer a lot of menu choices, people will visit your business but it’s less likely they’ll actually spend money while there.
For a restaurant, having lots of visitors is great, but what really counts at the end of the day are sales.
Less Is More
I bought into my first restaurant with a few thousand dollars. I waited months as the price dropped periodically and when it was within my budget, I pulled the trigger. I met with the owner and formed a partnership: He would do the books and I would take care of management and operations.
It was a small deli with a capacity of only 41 people, including employees. There were many issues that needed to be addressed. One of the glaring issues was the menu size. There were almost 25 different kinds of sandwiches to choose from.
This many menu choices forces a restaurant to stock large amounts of different ingredients, which cost money.
You know, the more times you do something, the better you get at it. This showed in the customer feedback.
Large menus also require more prep, which in turn requires more labor. With labor being one of the biggest budget expenses, this can quickly land you in trouble if your sales aren’t where they should be.
My Solution (and it worked).
If you have a POS system, you should be able to run a report that shows menu item sales. You can see what restaurant menu items sell well versus those that don’t. I used my report to cut the menu down to just eight items.
I kept the most popular items and developed a few new menu items of my own. Doing this allowed me to cut my food cost (money spent on buying ingredients) in half. With extra money in the budget, I was able to bring in better ingredients and increase the value to the customer.
Guess what else happened: SALES WENT UP!
It’s true. My deli was next to a few businesses who only had 30 minutes for lunch. The new menu allowed my customers to quickly select an item, pay for it, and then quickly eat or take their food to go.
The smaller menu allowed me to focus on preparing my sandwiches perfectly each time. You know, the more times you do something, the better you get at it. This showed in the customer feedback.
It also allowed me to plan out how much to food to prepare for the lunch rush. The restaurant ran smoothly, customers were happy, and sales began to grow steadily every day.
It’s a good idea to keep your menu simple. Monitor your sales to see what’s working and what can be changed. The smaller menu allows you to focus on the food and running your business well.
Questions or want more info? Feel free to contact me any time.