Airport Experience® News - Food & Beverage Issue 2023

DAVID SCOTT PETERS Owner of Take Action Enterprises, LLC

makes sense for operators to use that tactic with their higher-margin offerings. “Boxing an item can increase the sales within that category by 30% or more,” Willard says. “But you have to use it carefully - if you box two items, you’re kind of cutting the effectiveness in half. “I would never box the top item,” he continues. “It goes back to primacy and recency. The top item is already benefitting from primacy. You should use the box on something else that is a little bit more buried, maybe listed second or third.” Restaurants relying on digital menus rather than physical menus should take a slightly different approach, Willard adds. “The same tools can work but with digital menus we have a shorter attention span,” he says. “The typical customer spends about three minutes with [a physical menu]. Cut that in half for a digital menu.” The strategy shifts to list higher-margin items first. “I’d start with appetizers, maybe beverages if it’s a cocktail-forward restaurant, then jump right into entrees.” Menu Prominence Willard also suggests that restaurants using self-service kiosks or order-at-counter options have their menu prominently placed so that customers can make their choices ahead of time. “Once you get [to the counter or kiosk], you feel overwhelmed,” Willard explains. “When customers feel that pressure, they tend to spend a little bit less and tend to commoditize their order. For example, my default is a Ruben sandwich. If I’m feeling pressured and a place has a Ruben sandwich, I order it. It’s not necessarily going to be a great experience – there’s no excitement. It de-monetizes the order and it takes that restaurant down a little bit in a perceived quality.”

Costs are front and center in any menu strategy, notes David Scott Peters, a restaurant expert and coach who founded Take Action Enterprises. Peters says he’s encountered many restaurateurs who don’t have a good handle on exactly how much each menu item costs to produce. “You’ve got to know where your prime cost or total cost needs to be – that’s the cost of goods plus labor, including taxes, benefits, and insurance. Generally speaking, experts used to throw around the 65% number but we work towards a 55% prime cost. That means for every dollar that comes in, you’re going to spend 55 cents on people and product to deliver that product.” Peters stresses the need for accurate, up-to-date recipe costs, and says that based on those, restaurateurs can find their ideal food costs. “The ideal food cost is the cost if you followed recipes perfectly, no waste, no theft, no spoilage,” he says, noting that level of perfection doesn’t exist in the real world. If a restaurant’s ideal food costs are 30% of the menu price, it doesn’t make sense to simply price every item accordingly. Some items will have much higher costs but can drive volume purchases; while others will have lower food costs, thus delivering higher margins for each item sold.

If the goal is 30% food costs, however, the restaurateur should shave off a few percentage points, Peters contends. “A typical restaurant runs seven to nine points above their ideal food cost, due to waste, theft, spoilage, and just bad practices,” he says. “An incredible kitchen manager is going to operate at one and a half to two points above ideal - that’s if they are rock stars.” He advocates building in a three to four percentage point cushion. Tweaking Price and Offerings While acknowledging the contractual limitations that airport operators face, Peters also advocates for bumping up margins on a restaurant’s most popular items when possible. “The first thing I’d do is raise the price on the top two or three items,” he says. “If the item that damn good, it’s that damn good at any price. Your customers are telling you what they like. Even if it’s more expensive, it’s still a value because it’s incredible. If it sucks and you charge a lot, that’s when customers get upset. “Then, examine which items sell the least,” Peters continues. “If you sell under two a day and even three a day, those are on the potential chopping block. In the old days before Covid, I used to advise people to get to about 35 menu items but now I’m advising most people to get closer to 20. The reason is you need to reduce the amount of product you buy and put on the shelves. You don’t have the ability to find the best employees like you used to. You’ve got to be able to train people and the more they prepare the same items every single day, the more consistent your operation is and the happier your guests are.”

Left: David Scott Peters, restaurant expert and coach at Take Action Enterprises.

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