Creating a Winning Menu with Best Seller, Slow Seller Analysis

Do you know what restaurateurs really need to make informed menu and pricing decisions? Clearly, they need a bestseller, slow seller analysis!

In this article, we'll explain what this important analysis means and how you can use it as a guide to effectively manage your menu.

Why this analysis matters for your restaurant

The best seller, slow seller analysis gives you a clear understanding of which items on your menu are most popular and which are less frequently ordered.

That means: It gives you insight into the popularity and profitability of your products, so you can act accordingly and optimize your menu.

In the restaurant industry, these insights are especially valuable. Restaurant menus often expand over time, and sometimes it can be difficult to keep track of ingredient costs, current trends, and pricing.

This is where best seller, slow seller analysis comes in. The analysis helps by categorizing the items being sold. This makes it easier for restaurateurs to decide which items to keep, which to adjust, and which to remove from the menu altogether.

Step-by-step to a successful menu analysis

The best seller, slow seller analysis is a practical tool for restaurateurs to determine which dishes are selling best and how profitable they are. And here’s how it works:

Step 1: Determine sales volumes and contribution margins

Start by calculating the sales volume and contribution margin of your dishes.

Contribution margin is the amount left over after subtracting the cost per unit from the selling price. Sales volume is the number of units sold for each dish.

Step 2: Calculate averages

Once you have the individual values for sales and contribution margins, calculate the average for both metrics.

Add up all the sales and contribution margins and divide by the number of products to get the averages needed for the next step.

Step 3: Classify your products

Now comes the crucial part of the analysis: classifying your products. Compare your dishes to the averages and sort them into the following four groups:

Winners (Sales > Ø; Contribution Margin > Ø): These dishes are your best sellers and contribute significantly to your sales. Make sure you promote them even more.

Best sellers (Sales > Ø; Contribution Margin < Ø): These items sell well but generate less profit than your winners. Consider raising the price or cutting costs.

Losers (Sales < Ø; Contribution Margin < Ø): These products sell poorly and generate low profit. Consider adjusting or removing these dishes from your menu.

Slow sellers (Sales < Ø; Contribution Margin > Ø): These items sell poorly but contribute significantly to the bottom line. Improve marketing, make adjustments, or lower the price.

Applying the analysis: a practical example

Suppose you offer three entrees in your restaurant: Burger, spaghetti, and fish filet. You want to find out which dishes are popular and which are less preferred by your customers.

1. Determine sales volumes and contribution margins

🍔 Burger: 600 sold, cost per unit: €3

🍝 Spaghetti: 300 portions sold, cost per portion: €2

🐟 Fish filet: 100 sold, cost per unit: €7

2. Calculate averages

🍔 Burger: Selling price €14, contribution margin (€14 - €3) = €11 per unit

🍝 Spaghetti: Selling price €8, contribution margin (€8 - €2) = €6 per portion

🐟 Fish filet: Selling price €20, contribution margin (€20 - €7) = €13 per unit

Average sales volume: (600 + 300 + 100) / 3 = 333.33

Average contribution margin: (€11 + €6 + €13) / 3 = €10

3. Classify the Products

🍔 Winner: Burger (Sales 600 > Average 333.33; Contribution Margin €11 > Average €10)

🍝 Loser: Spaghetti (Sales 300 < Average 333.33; Contribution Margin €6 < Average €10)

🐟 Slow seller: Fish filet (Sales 100 < Average 333.33; Contribution Margin €13 > Average €10)

How best seller, slow seller analysis enhances your menu

No restaurateur should overlook the best seller, slow seller analysis. It is critical in the restaurant industry to analyze and design a menu that will sell well and ensure long-term profitability.

Keep an eye on your menu, know your top sellers, and improve or remove items that aren't performing well. Best seller, slow seller analysis provides clarity on the popularity of your dishes and their contribution to your financial success.