MENU ANALYSIS - The PLOWHORSE

PLOWHORSE – High Popular and Low Profitability
Having some of these on the menu is not necessarily a bad thing. They may appeal to a price conscious customer and/or may be used as a loss leader. A loss leader is an item that is highly popular and yet purposely low to no contribution margin in order to motivate buyers. The greatest concern is having too many plowhorses on the menu.

1. Hide the item on the menu assuming it’s taking up a prime location on the menu. This way, if people want the item, they find other more interesting (and better contribution margin) items before they get to it.

2. Increase the contribution margin by:
A) Raising the price
B) Lower the food cost
C) A little bit of both
But be careful with extremes. Any noticeable differences to the customer may be perceived as negative and therefore cut into popularity.

3. Try combining it with a lower cost item to achieve a greater contribution margin. Ex: Don’t just sell a steak, but make it possible for the customer to also get a combo platter of steak and chicken. There typically is greater margin and chicken and with the hedonistic combination, the margins may be closer to balancing one another out.