Optimising menu pricing strategy
Step 1: Menu and Food Costing
This first step is very crucial to create a menu price model for the restaurant. If one wants to earn profits and prosper in an industry infamous for super less margins, understanding the food cost percentage for every element of menu is your one shot. For this, one needs a complete menu and POS system based in-depth sales reports.
Step 2: Stay Away from Comparing with Direct Competitors
The restaurant pricing must not be built on your current competition. The menu should be independent and one should remember that forging value is not just price based. It’s also dependent on great service, superb ambiance and impeccable food presentation.
Step 3: Play to Your Strengths
The menu needs to speak for itself, the stellar items in menu has to be one-of-a-kind and will help build a brand distinguished from others. Bringing in items that highlight your restaurant from competitor allows one to price the menu differently. Being poles apart is great; it makes it stand out, create brand image and charge more for the star items.
Step 4: Ignore the Competitors but Don’t Ignore the Market
It's always in the interest of business to do a detailed research, grasp the process of how the market prices menu items, and get on with competitive pricing analysis.
When there is an interested audience, one can charge whatever he feels like, but to a point. If the prices makes the guests uncomfortable and doubt the item’s worth, they’ll walk away fast. Always keep your eyes on the market, know about new restaurants and the ones on brink of closure and use that information in polishing the menu every 3 months.
Step 5: Balance out the Menu
The trick to ace the menu pricing strategy game is to keep the high cost menu items in balance with the low cost ones. It requires time, testing, and continuous analysis in order to get the balance of menu right. Keep the food costs updated and precise so it’s known how much everything on the menu costs. Don’t back down from investing in a latest point of sale system that will help create accurate reports and lastly stay committed, patient and focused towards the strategy.