Menu Shrinkage to Lower Costs, Increase Profits

August 26, 2014 by Leave a Comment

For a long time, in order to satisfy the consumer demand for more menu options, restaurants would try to add more choices. However, this is not the most effective way to stay competitive and increase profits. Here at TaraPaige Group we work with our clients to reduce their core menus in order to keep the offerings streamlined and simple. Shrinking the menu will allow a restaurant to cut costs and focus more of their efforts more on their most popular offerings.

The theory of less is more definitely applies here, as consumers (especially millenials) appreciate food quality over quantity. Chief Operating Officer of Tony Roma’s, Brad Smith, states that “We can no longer be everything to everybody all the time..I don’t think customers are out there counting the number of items. It’s about producing better quality products.” Tony Roma’s has already reduced their core menu items from 92 to 60. Other chains are doing the same.

BJ’s Restaurant has cut their entrees by 30 items and is aiming to get closer to 100 down from 181. Julia Stewart, CEO of IHOP’s parent company DineEquity has shared that IHOP has reduced its emu items from 200 down to 170. Darren Tristano, executive vice president of Technomic noticed that the average number of menu items in chain restaurants began to fall this year for the first time in a decade. Tristano mentions that, “Too many choices make it hard for consumers to make a choice..it also can make it difficult for consumers ‘to remember why they go to a particular restaurant,’ so the industry is moving from ubiquity to specialization.”

To read more about the less-is-more philosophy and how to reduce core menu offerings in order to lower costs, increase profits and still keep guests satisfied, click here

Filed Under: Global Market Buzz

Fake Scarcity in the New York Food Scene

August 26, 2014 by 1 Comment

There is an interesting phenomenon occurring in the New York City Food Scene: that of fake scarcity. Food establishments are making their products or dishes hard to get as opposed to boasting a bountiful fully-stocked quantity of their products. This is the case in the fashion industry, where consumers will line up for coveted limited-edition limited-supply designer pieces, which makes sense to a certain degree, however should this also be the case for lunch or  a pastry? Totonno’s pizzeria in Coney Island is known for the times when customers used to be ushered away because the pizzeria had run out of dough, causing customers to line up early to ensure this wouldn’t happen to them. They now operate with sufficient dough for the demand, however the hype and memory of the frenzy that was caused by the running out of dough at Totonno’s will remain. This seems ironic, however the limited availability of a product and the hype that ensues if a product ‘runs out’ (although designed this way) gives the guest the impression that it must be an outstanding product worth lining up for.

A great example of this phenomenon is Dominique Ansel’s cronut. New Yorkers are willing to start queuing at the crack of dawn to get their hands on one of the 450 $5 croissant-donut hybrids. For those who are not willing to line up early, there is a “cronut black market” where the item can be made available for $40 each. Another example is at a restaurant downtown in SoHo called Raoul’s. Raoul’s is known for only making 12 hamburgers per day. 12 hamburgers. The line begins to form at 4:30 PM, an hour before the kitchen opens, and if you are lucky to get to order one of these 12 burgers you may only enjoy it at the bar. David Honeysett, chef at Raoul’s admits that, “If anyone could order a burger, it would really interfere with dinner service..Our check average now is much higher than what a burger would produce.”

Clark Wolf, a local restaurant consultant sums up the fake scarcity phenomenon by expressing that, “In New York, people love getting what they can’t have or fighting for it..running out can create drama and notoriety.” To read more about the marketing principle of limited supply in the New York City food scene, click here

Filed Under: Local Market Buzz Tagged With: