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Thursday, May 10, 2007

Dealing With A Portion Problem

Let's say you install a very tight portion control system with a POS feed, a sophisticated recipe model, weekly inventories and a complete purchasing history. After three weeks of fine tuning the recipe model, you realize your kitchen staff were given the wrong portion size for your most popular menu item.

Roughly one third of your customers choose this item as their entree. This entree uses a pricey meat which costs $15 per trimmed pound. Our current portion size is two thirds of a pound instead of the standard one half pound portion. We charge $25 per entree. We serve 120,000 annual covers. The $2.50 per cover variance has an annual unfavorable impact of $100,000. Should you immediately require the kitchen to cut the portion to the standard?

There are many issues involved in this decision. Obviously, your frequent diners have become accustomed to a more generous portion size. It is very likely they would perceive the difference if you reduced the portion at once. Local competition is a key factor. Option one is to do nothing at all.

I would begin to correct the problem slowly. Make a new standard of 10 ounces. This is a small difference and you'll get 16 portions from 10 pounds trimmed. Currently, we use an extra 2/3 of a pound. You'll save this $10 for each 16 portions ($25,000 per year). Track the new standard closely and keep new menu price increases in line with your past policies. Always check local competition carefully before changing the price on a key item.

When the portion size is unchanged on a star menu item, price increases are less likely to impact customer perception. I would avoid decreasing the size and increasing the menu price simultaneously. Wait until your normal menu revision month to raise the price.

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