What it is
It is a method for analysing the menu, published by Michael Kasavana and Donald Smith in 1982. It looks at each dish with two questions: does it sell a lot or a little? Does it leave a big or a small margin? Depending on the answers, each dish falls into one of four groups.
What you need
- Units sold of each dish over a period, taken from the POS.
- Selling price excluding VAT.
- Cost per portion, from its costing.
The two cut-offs
Dish margin = price excluding VAT − cost per portion
- Popular: it sells at least 70% of what it would if every dish in the section sold the same amount.
- Profitable: its margin is equal to or above the section's average margin, weighted by units sold.
The four categories
| Star · popular and profitable | Keep it |
| Plowhorse · popular, low margin | Raise the price or cut the cost |
| Puzzle · profitable, not very popular | Give it more visibility |
| Dog · neither | Drop it or rework it |
An example with five starters
| Croquettes · 620 units · margin €6.20 | Star |
| Russian salad · 410 units · margin €4.10 | Plowhorse |
| Octopus · 180 units · margin €11.50 | Puzzle |
| Tartare · 90 units · margin €9.00 | Puzzle |
| Peppers · 200 units · margin €3.20 | Dog |
1,500 starters are sold, so the popularity cut-off is 1,500 ÷ 5 × 70% = 210 units, and the weighted average margin comes to €6.03. The croquettes pass both cut-offs; the Russian salad sells but earns little; the octopus and the tartare earn a lot but are rarely ordered; the peppers pass neither.
What to do with each one
- Croquettes: don't change them. A good spot on the menu and always the same recipe.
- Russian salad: raise the price by €0.50 to €1, or adjust the portion and cost without it showing.
- Octopus and tartare: a better spot on the menu, a better description and have the floor staff recommend them.
- Peppers: drop them, or rework them at a different cost or price.
How often
Every month with your POS sales and at every menu change. A dish can move group with the season or with the price of its ingredients.