Menu Development, Planning, and Design: Costing and Pricing Analysis

This report provides a comprehensive overview of menu development, planning, and design, focusing on costing and pricing strategies in the restaurant industry. It discusses key elements in menu pricing, including food cost and gross profit margin methods, and emphasizes the importance of accurately costed and priced menus to meet diverse customer requirements. The report analyzes various approaches to menu costing and pricing, such as competitor pricing, demand pricing, psychological pricing, menu engineering, and the impact of ingredient seasonality and labor costs. Practical examples are provided to illustrate the application of these strategies. The report concludes that effective menu planning, considering customer satisfaction and business goals, is crucial for the success of restaurants and food service institutions, referencing relevant academic literature to support its findings.

MENU DEVELOPMENT,
PLANNING AND DESIGN

TABLE OF CONTENT
• Introduction
• The key elements while pricing and costing of menus
• Produce accurately costed and priced menus to meet range of customer
• Analysis of approaches to menu costing and pricing
• Conclusion

INTRODUCTION
Menu exhibits the list of food, salad, appetizers,
beverages, deserts etc. including there prices,
ingredients used and sometimes pictures of dish,
either physical in print form or on electronic
devices. Menu planning is the systematic process
to where the types of food, drinks, their prices,
colour, target market and other factors are
considered to design the exclusive menu for the
obtaining the aims of restaurant.

THE KEY ELEMENTS WHILE PRICING AND
COSTING OF MENUS
• There are two ways by which the
pricing and costing of the menus can
be determined that are food cost and
gross profit margin method. Both the
methods of determining the price of
certain menu involves backward or
declining approach to identify the
expenses that influences the price of
certain product.

CONTINUE…
• Identification of expected food cost
ratio: This could be done by
Restaurant Sat Bains by identifying
their profits let say 20% and pricing
it on the menu to understand that
expenses are accepted by guests or
not.

CONTINUE
• Determining the cost of sold items: Restaurant Sat
Bains could utilise bar inventory software like
BinWise Pro to figure out their expenses on raw
material and what they gain from each sale.

CONTINUE
• Calculate how to price food items: The
price for a particular item in menu could
be obtained by dividing cost of goods
sold by ideal food cost. This is one way
of deciding price for a particular item by
food cost and many other ways can be
adopted.

PRODUCE ACCURATELY COSTED AND PRICED MENUS
TO MEET A RANGE OF CUSTOMER REQUIREMENTS
A B C D E F G H I J
Menu Item Total
Sold
Menu Price Portion Cost Food Cost
%
Portion
C.M.[1]
Total Food
Sales
Total Food
Cost
Total C.M. C.M.%
Wild garlic soup, bacon
and olive oil
12 £10.95 £2.75 25.00% £8.20 £131.40 £33.00 £98.40 24.00%
Bubble and squeak,
asparagus
8 £11.95 £4.25 36.00% £7.70 £95.60 £34.00 £61.60 15.00%
Strawberry Pavlova 10 £6.95 £3.75 31.00% £8.20 £69.5 £21.5 £48 20.00%
Yule log 5 £10.95 £3.50 32.00% £7.45 £54.75 £17.5 £37.25 9.00%
Cranberry, apricot and
sage stuffing
4 £14.95 £5.25 35.00% £9.70 £59.80 £21.00 £38.80 9.00%
Festive Black pudding in
blankets
6 £12.95 £4.00 31.00% £8.95 £77.70 £24.00 £53.70 13.00%
Scotch eggs and brown
sauce
5 £15.95 £7.25 45.00% £8.70 £79.75 36.25 £43.50 10.00%
Totals 50 £568.5 £151 £337.75

CONTINUE
Item Total
Sold
Menu Price Portion Cost Food Cost
%
Portion C.M. Total Food Sales Total Food Cost Total C.M. C.M.%
Pimm's 31 £6.75 £1.93 28.59% £4.82 £59.83 £209.25 £149.42 4.63%
Mandarin Mojito 211 £6.75 £1.72 25.48% £5.03 £362.92 £1,424.25 £1,061.33 31.54%
Champagne and sparkling 71 £6.95 £1.53 22.01% £5.43 £108.63 £493.45 £384.82 10.61%
Sweet Wine 19 £7.50 £2.23 29.73% £5.27 £42.37 £142.50 £100.13 2.84%
Rose Wine 78 £5.95 £1.55 26.05% £4.40 £120.90 £464.10 £343.20 11.66%
Cote De Nuits 129 £6.45 £1.68 26.05% £4.77 £216.72 £832.05 £615.33 19.28%
Alsace 130 £6.95 £1.76 25.32% £5.19 £228.80 £903.50 £674.70 19.43%
Total 669 ACM = £4.98 £1,140.70 £4,469.10 £3,328.93 100.00%

MENU SAMPLE

MENU SAMPLE

ANALYSE APPROACHES TO MENU COSTING
AND PRICING
• There are many strategies and approaches
that can be helpful in costing and pricing of
menus to maximise profits. Some of the
approaches involve internal factors such as
gross profit margin or food cost as
explained above. Whereas, the external
factors involve competition and clientele
that could be used for pricing of the menu,
these factors are as follows-