Menu Engineering & Pricing
Use AI to analyze menu profitability, optimize pricing, design menu layouts that sell high-margin items, and create compelling item descriptions.
Your menu is more than a list of dishes — it’s your most powerful sales tool. Every decision about what’s on it, how it’s priced, where it’s placed, and how it’s described directly impacts your bottom line.
Menu engineering is the science of analyzing each item’s profitability and popularity, then using that data to make smarter decisions. Most restaurants do this by gut feel. You’re going to do it with data.
The Menu Engineering Matrix
Every menu item falls into one of four categories based on two factors: contribution margin (dollars of profit per item) and popularity (percentage of orders).
| Category | Margin | Popularity | Strategy |
|---|---|---|---|
| Stars ⭐ | High | High | Protect and feature prominently. Never change the recipe. |
| Puzzles 🧩 | High | Low | Promote — better placement, description, server recommendations |
| Plowhorses 🐴 | Low | High | Reengineer — reduce portion, source cheaper ingredients, or raise price |
| Dogs 🐕 | Low | Low | Consider removing or completely reimagining |
AI prompt for menu analysis:
You are a restaurant menu engineering consultant. I’ll provide my menu items with: name, selling price, food cost, and monthly units sold. For each item, calculate: food cost percentage, contribution margin (price minus food cost), popularity percentage (item units ÷ total units), and classify as Star, Puzzle, Plowhorse, or Dog using the Boston Consulting Group matrix. Then provide specific recommendations for each category: which Stars to protect, which Puzzles to promote, which Plowhorses to reengineer, and which Dogs to consider removing. Use these thresholds: average contribution margin as the high/low divider, and average popularity as the high/low divider.
✅ Quick Check: Your pasta primavera has a 22% food cost but contributes only $7.20 per plate. Your ribeye has a 38% food cost but contributes $19.80 per plate. Which one makes you more money? (Answer: The ribeye — by a lot. You bank $19.80 per ribeye vs. $7.20 per pasta. Sell 50 of each: the ribeye generates $990 vs. the pasta’s $360. This is why contribution margin matters more than food cost percentage. AI calculates both for every item so you’re never fooled by low percentages on low-dollar items.)
AI-Powered Pricing Strategy
Pricing is where most restaurants leave money on the table. A $1 price increase on your top 5 items, if they sell 50 units each per week, adds $13,000 per year — with zero additional cost.
Price anchoring and psychology:
| Technique | How It Works | AI Application |
|---|---|---|
| Anchoring | Place a high-priced item (like lobster) near items you want to sell — the contrast makes them seem reasonable | AI analyzes your menu to recommend anchor item placement |
| Charm pricing | $13.95 feels cheaper than $14 — but $14 feels cleaner for upscale dining | AI recommends pricing style based on your concept |
| Bundle pricing | “Soup + sandwich $16” vs. “$10 soup + $9 sandwich” saves $3 while increasing perceived value | AI identifies items that bundle well based on margins |
| Decoy pricing | Three sizes where the medium is priced to make the large look like a deal | AI calculates optimal decoy pricing |
| Remove dollar signs | “Grilled Salmon 24” instead of “$24.00” — reduces price sensitivity | Simple formatting change |
AI prompt for pricing optimization:
Analyze my restaurant’s pricing strategy. Here are my top 20 items with: name, current price, food cost, monthly units sold, and category (appetizer/entree/dessert/drink). For each item: (1) calculate contribution margin, (2) compare to category averages, (3) identify items where a $0.50-$2.00 price increase would be absorbed without affecting demand (based on value perception relative to competitors and margins), (4) suggest bundle opportunities, and (5) recommend anchor pricing placements. My concept is [CASUAL/FINE DINING/FAST CASUAL] in [LOCATION] with an average check of $[AMOUNT].
Menu Description Writing
Descriptive menu language increases sales by 27% according to Cornell research. AI generates compelling descriptions faster than you can agonize over one.
AI prompt for menu descriptions:
Write menu descriptions for these items at my [CONCEPT TYPE] restaurant. For each item, create a 15-25 word description that: uses sensory language (taste, texture, aroma), mentions sourcing when relevant (“local farm,” “house-made”), avoids generic words (“delicious,” “tasty,” “yummy”), and matches our brand voice [CASUAL AND FUN / ELEGANT AND REFINED / RUSTIC AND HOMESTYLE]. Items: [LIST ITEMS WITH KEY INGREDIENTS AND PREPARATION METHOD].
Before vs. after examples:
| Before | After |
|---|---|
| Grilled Chicken Sandwich — Chicken breast, lettuce, tomato, mayo on a brioche bun. $14 | Wood-Grilled Chicken Sandwich — Free-range chicken breast charred over oak, crisp butter lettuce, vine tomato, roasted garlic aioli, toasted brioche. 14 |
| Caesar Salad — Romaine, parmesan, croutons, Caesar dressing. $12 | Classic Caesar — Hand-torn romaine, shaved Parmigiano-Reggiano, house-baked garlic croutons, tableside-tossed in our anchovy-forward dressing. 12 |
✅ Quick Check: Why do descriptive menu items sell 27% more than plain listings? (Answer: Descriptive language activates sensory imagination — readers taste and smell the food before ordering. Words like “slow-roasted,” “house-made,” and “wood-fired” signal quality and care. Origin stories (“sourced from local farms”) add perceived value. The description justifies the price and creates anticipation. AI generates these descriptions in seconds for every item on your menu.)
Menu Layout and Design
Where an item sits on your menu affects how often it’s ordered. Eye-tracking studies show predictable patterns that AI can help you exploit.
Strategic placement:
| Position | Eye Traffic | Best For |
|---|---|---|
| Top right (first page) | Highest attention | Your highest-margin Star item |
| Boxed/highlighted items | 2x attention vs. unboxed | Puzzles you want to promote |
| First item in a section | High attention | High-margin items |
| Last item in a section | Moderate attention | Second-tier stars |
| Center of a page | Often skipped | Plowhorses (they sell themselves) |
AI prompt for menu layout optimization:
Based on my menu engineering analysis (Stars, Puzzles, Plowhorses, Dogs), recommend the optimal layout for my [NUMBER]-item menu across [NUMBER] pages/sections. For each section (appetizers, entrees, desserts, drinks), specify: which item goes first (highest margin), which gets a callout box (best Puzzle), and which items to group near the price anchor. My concept is [TYPE] and my average check target is $[AMOUNT].
Key Takeaways
- Classify every menu item as a Star, Puzzle, Plowhorse, or Dog — AI calculates contribution margin and popularity to sort your entire menu in minutes
- Focus on contribution margin (dollars), not food cost percentage — a 40% food cost item that contributes $18 is far more profitable than a 20% food cost item that contributes $5
- Descriptive menu language increases sales by 27% — AI generates sensory, compelling descriptions for every item on your menu
- Strategic menu placement puts high-margin items where eyes naturally go — top right, boxed sections, and first position in each category
- A $1 price increase on your top 5 items (50 units each per week) adds $13,000 per year with zero additional cost
Up Next
In the next lesson, you’ll tackle the other side of the profitability equation — food cost control. You’ll build AI systems for inventory tracking, waste reduction, recipe costing, and supplier analysis.
Knowledge Check
Complete the quiz above first
Lesson completed!