Category management: boosting your restaurant profits and image Sunday 23 August 2020
For restaurant experts, making sure your whole business runs smoothly is a constant work in progress. To make the most of your portfolio, you are always looking for an optimal match with your consumer profile. But that also means that each part of your menu has to perform and click. Category management can help and even boost your image, so get ready to find out how.
Category management: a piece of cake
Imagine your restaurant as a cake. It goes without saying that you want to make sure that every slice looks and tastes great. Now consider that each slice represents a category of products on your menu. One slice may represent your drinks, for instance, while others are your protein (meat, fish, chicken, etc.), your carbs and your desserts. Category management is all about improving these slices, so the whole cake becomes bigger and better! That’s the goal, as it will allow you to grow your by managing your restaurant more smartly. Simply said: how can I make the most of my cake?
The concept of category management comes from retail and is used by supermarkets, which strive for optimal conversion with limited shelf space by introducing different formulas that target specific consumer profiles. Hypermarkets, for example, serve customers that need a bit of everything and want to stock up for a week (from a carton of milk to a new lawnmower), whereas on-the-go shops have a smaller selection of luxurious and single-portion products for that day or right now. On top of that, there are traditional local supermarkets that sell a more balanced range of products. In each of these examples, the product range has been tailored to the specific needs of the consumer profile in question.
The bottom line of category management is to have optimal product rotation and create value so as to achieve maximum conversion with a great menu. It enables you to improve every aspect of your menu by matching each category to your customer needs, restaurant identity, and overall portfolio.
The Art of the Menu
So how do you start practising the art of optimizing your restaurant menu? It all depends on who you are and whom you serve. But first, let’s have a look at your restaurant’s fundamentals to get started:
- Look into what your customers expect. Do they sit down and take their time, or do they need quick service and easy choices? This will help you define your portfolio.
- What is your restaurant’s story and what role does your food play? Define that story and create a matching product portfolio that contributes to the overall experience. After all, you are what you eat (and serve). Take an American Steakhouse restaurant, for example, where the meat would be the core of the business, supported by salads, fries, and drinks.
- Draw up your menu and check if it matches your story, concept, and consumer expectations. Which categories do you need and are they all in place? Which roles do they play in the overall concept? For example, in a burger restaurant, your burgers are the drivers, whereas your drinks are a supporting category with a large profit margin.
If you’ve answered the first 3 questions, we’re done prepping and ready to get cooking. Time to start taking your first steps in category management:
- Which categories matter most for your business? Obviously, your drivers matter for your business, but you may find that a different category is actually your main revenue generator. If you’re a salad bar, salads will obviously be a driver, but drinks might have the largest margin. Each category plays a part and knowing them helps you direct your efforts.
- Analyse your key categories and see if they fulfil all consumer needs. You want to make sure you have the exact right fit, so you offer precisely what your guests are expecting to order. Are you missing out on potential hot cakes or are there products you could just as well do without? Category management allows you to see the whole picture.
- Finally, identify ways to increase value per category. Perhaps you can increase rotation with smart promotions. Or perhaps your personnel could play a vital role by advising guests on food pairings or upgrades!
Always focus on the bigger picture
Now you know what to do, it’s time to get started! Remember, it’s all about the overall restaurant experience, so even if you optimize each category, it still needs to match your identity. Cheap is not always better if you want to provide the right experience, so use this method to improve your customer experience. Give your customers value for money and they’ll be coming back for more!
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