According to Lumina Intelligence’s Menu Tracker Q1 data, total dish prices across major UK operators rose by 7.4% with coffee shop and sandwich channels experiencing inflation 5% higher than overall food and beverage levels.
As menu inflation continues to outpace ONS’s food and beverage figures, operators have raised menu prices by between 3% and 13.9%. Restaurants have also raised prices to stay stable and competitive.
When costs rise and margins tighten, effective pricing becomes critical. That’s where menu engineering comes in, helping you price smarter and potentially increase your restaurant’s or coffee shop’s profit margin by 10–15%.
In this guide, we’ll break down what menu engineering is, the key elements that drive it and how to apply it to improve your restaurant’s bottom line.
What is menu engineering 101?
Menu engineering is a data-driven method that restaurants use to improve menu performance and profitability. It looks at each item’s popularity and profit margin to see which dishes are worth promoting, adjusting or removing.
By analysing sales data, food costs and customer choices, restaurants can design menus that naturally guide diners toward higher-profit items while keeping the overall experience enjoyable.
5 Key elements of menu engineering
Before you do menu engineering, you need to know the key elements that influence customer choices. Here are five essential areas to consider:
1. High attention areas
Customers naturally skim menus rather than reading them top to bottom. Understanding these patterns allows you to place high-margin dishes where they’re most likely to be noticed.
Diners usually spend the first 15–20 seconds scanning the entire menu. After that, they focus on each category that interests them for about 27 seconds. Make sure to place signature dishes and drinks in these high-attention areas to increase visibility.
Placement within these areas also matters:
- The first items in each category get around 25% more visual attention
- Items in dense text blocks receive roughly 45% less attention
- Items listed last in long columns are often overlooked
- Items placed next to other prices tend to attract less focus
Once items are well-placed, design elements can draw extra attention. Boxed items attract about 21% more focus but limit them to 2–3 per page and reserve borders for high-margin dishes or chef’s specials.
2. Descriptive language
Menu item descriptions can significantly influence customer choices. Use short descriptions that highlight the most enticing aspects of a dish.
Incorporate words that evoke positive emotions and familiarity such as home-made, proper, family recipe or traditional. These terms can make dishes feel more authentic and appealing for guests to order them.
3. Visual elements
For dine-in menus, avoid using photos as they can sometimes make dishes seem cheap or mass-produced. For online menus such as takeout or delivery, images can be effective in encouraging orders and boosting sales.
Font choice also impacts how customers perceive your menu and can subtly influence spending. Recommended fonts include:
Dining Type | Main Text | Prices | Descriptions |
Premium Dining | Serif fonts (Garamond, Caslon) | Lighter weight than dish names | Italic for elegance |
Casual Dining | Sans-serif fonts (Brandon, Proxima Nova) | Same weight as dish names | Regular for readability |
No matter the style, leave at least 40% white space on your menu. This creates clear visual breaks and makes it easier to read.
4. Menu length
Menu length is an important factor in menu engineering. Offering too many choices can overwhelm customers and make decision-making harder.
To simplify ordering, aim to limit each section to no more than seven options. You can also consider separate menus for lunch and dinner, keeping each one shorter and easier for customers to navigate.
5. Price psychology
The way you display prices subtly influences customer behaviour and spending. Here are a few proven techniques:
Anchor effect
This involves placing a high-priced item next to a similar lower-priced option, making the latter seem more affordable. This can encourage customers to choose the lower-priced item and increase overall sales and profit.
For example, placing a premium £12.50 grilled chicken sandwich next to a £7.50 ham and cheese toastie makes the toastie appear more reasonably priced and makes customers more likely to choose it.
Price-ending strategies
Choosing the right price endings can influence how customers perceive an item. Common approaches include:
Price Ending | Customer Perception |
.00 | Premium quality |
.95 | Good value |
.99 | Promotional or discount-focused for upscale items |
Currency removal
Removing the currency symbol can make customers less focused on the price and more willing to spend. For example, listing a dish as “18” instead of “£18” can reduce the sense of spending and encourage diners to choose it more freely.
The rule of three
Customers often avoid the cheapest and most expensive options when presented with three choices. You can use this to your advantage:
- Offer three versions of a similar dish at different price points
- Place the item with the highest profit margin in the middle
- Most diners will naturally select the middle option
If your menu lists a grilled chicken salad (£10), a pesto pasta (£15) and a steak salad (£20), placing the pesto pasta in the middle encourages more customers to choose it. This helps increase sales of your higher-margin dish.
When prices are set with both psychology and operational costs in mind, your menu becomes optimised for broader restaurant’s or coffee shop’s finance decisions.
How to do menu engineering? 4 simple steps
Now that you understand the basics, here’s how to apply menu engineering to your restaurant:
Step 1: Find your actual food cost
Start by determining the exact cost to prepare one portion of each dish on your menu.
Suppose you serve a classic Margherita pizza. You buy 10 pizza bases for £15, 1 kg of mozzarella for £8, and 500 g of tomato sauce for £3. A single pizza uses one base, 100 g of cheese, and 50 g of sauce. The cost breakdown would be:
- Base: £15 ÷ 10 = £1.50 per pizza base
- Cheese: £8 ÷ 1,000 g = £0.008 per gram; 100 g × £0.008 = £0.80
- Sauce: £3 ÷ 500 g = £0.006 per gram; 50 g × £0.006 = £0.30
The total ingredient cost for one pizza is £1.50 + £0.80 + £0.30 = £2.60.
Next, calculate the contribution margin which is the profit from each item. Subtract the cost from the selling price. If the pizza sells for £9, the contribution margin would be £9 − £2.60 = £6.40. This figure shows how much profit each pizza generates toward covering overheads and boosting your bottom line.
Step 2: Prioritise popular items
While calculating costs, start tracking which menu items are most popular with your guests. Choose a period of two weeks to a few months and record every dish sold during that time.
Once you have the data, rank your menu items from most to least popular. This will help you understand which dishes drive sales and where to focus your menu engineering efforts.
Step 3: Check profitability
Once you know which dishes are popular, compare their profits to decide which items to keep, promote or remove. Instead of calculating everything manually, use a simple four-quadrant graph. Plot dish popularity along the Y-axis and profitability along the X-axis.
Quadrant | Dish type | What to do |
Stars | Dishes ordered frequently by guests with high profit margins | Keep these items on the menu and continue promoting them |
Plowhorses | Popular dishes with lower profit margins | Avoid major changes but consider small price adjustments |
Puzzles | High-profit dishes that aren’t ordered often | Highlight on the menu or feature as chef’s specials |
Dogs | Unpopular dishes with low profit margins | Consider removing to streamline the menu |
Step 4: Monitor and optimise
After applying menu engineering, it’s important to continually review your metrics and assess the results. This helps you make informed decisions about new dishes, seasonal specials and overall menu strategy.
For deeper insights and strategic financial planning, professional support can be invaluable.
At Rise Accounting, our specialist hospitality accountants act as your outsourced finance function, helping you track costs, understand contribution margins per dish and maintain strong profit levels year-round.
Contact our team here to learn how we can support you.
