With wholesale food prices soaring 13 percent in 2021 and labor costs rising as worker shortages continue, many restaurants are looking for smart ways to lower costs and avoid passing them on to their diners. To mitigate these concerns, restaurants have gotten creative, looking for new cost-cutting measures. One such solution has been shrinking restaurant menus.
This past year, 60 percent of restaurants reported reducing their menu size, citing a 23 percent drop in the number of items. A smaller menu might limit ordering options but not the ability for restaurants to wow their guests. For restaurant operators, a reduced menu can be more agile and responsive to diners’ preferences. Plus, integrating guest management and order analytics tools can unlock the potential of limited menus for highly targeted customization.
With the right technology in place, restaurants can tailor smaller menus to the on- and off-premise dining preferences of their customers while leveraging automated marketing promotions to make the most of their offerings.
Advanced Customization On- and Off-Premise
Limited menus empower operators to change their offerings quickly and efficiently to dial into the most profitable combination of dishes for their businesses.
To do this effectively, operators can leverage data analytics to decide when to alter a menu to boost profitability. With the right technology at their restaurant, they can also quickly implement that decision. A scaled-down, customizable menu can, for example, help draw regular diners on premises with more frequent new offerings. An operator could easily add a new dish to the menu featuring seasonal vegetables, which are cheaper and easier to source, garnering fresh intrigue around the restaurant’s offerings.
Integrating a restaurant’s point-of-sale (POS) with robust guest profiles also allows operators to access deeper insights into which dishes work best on small menus for different types of diners. Say a NYC restaurant sees many large groups in its bar area on Friday nights but is worried a smaller menu might turn them away. With menu analytics tied to guest profiles, staff could first tag diners who are part of large groups, then analyze the most popular bar menu items these groups order and ensure they’re on the menu during their most popular reservation times. This insight reveals which menu items are most appealing to key diner segments and when they should be offered.
Leverage data to better understand off-premise guests, an operator can also quickly fine-tune a limited takeout menu for maximum profitability. Imagine a Chicago restaurant has a Greek salad not selling well through theironline delivery menu, despite it being a bestseller on-site. Through integrated customer reviews, an operator could identify the takeout users who ordered the item and comb through their feedback to discover if an item doesn’t travel well, is oversalted or something else entirely. The operator could then take necessary action, switching in heartier greens for the salad or making an update to the recipe. Using limited menus, easily tweaked based on diner data and feedback, operators can ensure they are tailoring their menus to attract the widest customer audience.
Upsells and Marketing Automation to Drive Revenue
A smaller menu also offers more options for upsells. This could include offering diners the option to try all the appetizers on the menu for a lower combined price or leveraging higher margin items, like alcohol, to create food and drink packages for guests. The key to unlocking more revenue is a dynamic and adaptable mobile ordering and payment system that enables operators to quickly and easily add upsells into the ordering interface.
Since reduced menus tend to change more frequently, they also give restaurants the opportunity to reach out to their customer base more often. With targeted marketing automation software, restaurants can identify diners that would get excited about new dishes and send them promo codes encouraging them to come into the restaurant to try the chef’s newest creation. This strategy could also apply to a restaurant making updates to its takeout menu to reflect seasonal ingredients or promoting a menu item collaboration with a local chef. Marketing automation can also target big spenders with first access to exclusive menus, playing up limited offerings for the establishment’s most loyal diners.
Small Menus, Big Potential
A limited menu offers a unique opportunity for a restaurant to be more efficient and adaptable while saving on food costs.
Small menus make each change more visible and impactful, and operators can use menu management technology to ensure with every new item or swap, the restaurant is learning more about their customers and streamlining operations.
Despite the persisting industry challenges that have led restaurants to shrink their menus, those that embrace tech will see outsized success as diners return.