Engineering seasonal menus: maximising margins for Christmas

Revenue Management Solutions managing director Philipp Laqué discusses how operators can ensure their menus are optimised to make a profit this Christmas.

Seasonal menu changes with a few timely additions are always a popular move, giving diners the chance to try something new or rediscover a forgotten favourite. Christmas in particular is a fantastic time to showcase innovative ideas and seasonal ingredients.

Customers are seeking experiences to lift the shorter days, and the chance to try a new dish at a much-loved local or sample emerging taste trends in the surroundings of a favourite brand can be irresistible. With this in mind, all operators should get in on the act and ensure their menus are optimised to make a profit this Christmas.

When re-engineering any menu, it’s crucial to know what will work as a promotional angle each season. Quick service restaurants and casual dining concepts benefit significantly from prominent holidays such as Christmas as it brings a chance to look at individual product categories: think hot drinks, warming mains and comforting desserts.

Not only are these items top of the customer’s list when it comes to dining out of home in colder weather, they are also some of the industry’s best performers in terms of profit margin. Operators should take a look at what they can do to optimise their menu for the season and drive profit.

The main drivers of seasonal success remain the same for all. Menu changes must:

  • Be easy to execute
  • Enable speed of service during peak times
  • Be designed with profitability in mind
  • Be described on the menu in an appealing way

Interestingly, operators can achieve these objectives for seasonal dishes by looking at the data held in their EPoS system. Analysis of the data can yield vital results, highlighting items with high profitability and showing operators where they need to focus their pitch to drive customer demand for these dishes. Of course, the analysis will also reveal which menu items that give a below-average profit contribution so these can be replaced or promoted differently.

The use of Christmas specials is a chance to showcase a chef’s creativity and promote local produce, while also using leftover or surplus ingredients. Operators should ensure these items are priced appropriately and the ideas should hold real mass appeal. Equally, if operators spend time training front-of-house staff to promote or upsell a seasonal special, they need to ensure it is an item that achieves profit equal to or greater than similar products or the effort will be wasted.

Consistency is key
While it’s imperative operators react to seasonal changes and reflect the current mood within their offer, consistency is also a key driver in customer loyalty. Sometimes, diners just want what they came in for, and loyalty will thrive when operators achieve that balance. A consistent customer experience needs not only to be addressed in food quality and taste, but also in brand identity, so maintaining a uniform menu design is important.

Menu refreshes and some changes to design elements are useful, to keep the brand fresh and relevant, but too many changes over too short a period can confuse customers, leading them to question the stability of the brand and sometimes causing a drop in transactions. With this in mind, before making changes to menu content and design, operators should consider testing the plans for a set time to fully understand the financial implications.

Pressure groups
Menu changes can also be used to increase profits in reaction to one-off occasions such as Bonfire Night or to pull in the crowds during the run-up to Christmas. The key to unlocking the potential at these times is understanding the underlying consumer need that has been triggered by the event. For example, with big Christmas and New Year events that generate widespread interest, it is likely that operators will see larger groups gathering together. In these circumstances, menus can be optimised for profit by offering special sharing dishes that also upsell or promote add-ons.

Operators can also offer in advance to cater for customers throughout their visit, without the need for any orders to be placed while the party is in full swing – perhaps by suggesting a pre-order per person. Not only does the customer not have to worry about queuing and looking after a large group, operators can prep the kitchen teams too, knowing what the bulk of their work will be and just handling ad hoc orders as they come in.

Chain reaction
Operators must not forget the ingredient supply chain when planning seasonal changes. Prestige Purchasing advises renegotiating at least twice a year, with refreshes usually taking place in June and December.

Winter is a particularly good time to renegotiate with suppliers, especially if the operator is planning menu changes and can incorporate seasonal flavours and ingredients to take advantage of the variety of foods available.

How much is too much?
Casual dining operators should incorporate seasonal elements into parts of their menu, but keep their classic products as part of the core offer because these items are often what makes the brand unique. Some chains are even able to create iconic seasonal products that are only available during a specific period, and these can really drive traffic. Starbucks’ Pumpkin Latte is one example, along with Pret à Manger’s iconic Christmas Lunch sandwich.

Really, the only time operators should be cautious about considering seasonal changes is if they don’t feel confident that the plans can be fully executed operationally, and could slow down the speed of service. Chains with a limited concept, Tex-Mex for example, should also be wary of trying to incorporate seasonal items which could just pile on the complexity for both the operations team and the supply chain. Adding complications usually increases costs and any uplift in profitability made by the new dishes would be lost.

Here are our top three tips on menu engineering for the Christmas season:

  1. The most profitable items should appear at the top and bottom of each menu section to attract the most attention;
  2. Chain concepts must keep the main section of their menu dedicated to their core offer so loyal customers can easily find their favourites. These operators should then reserve a specific section of the menu – a box to the side, for example – to host seasonal offers. Designing a menu like this keeps regular customers happy and also entices them to look at the new dishes. It’s also important to present menu options like this to maintain speedy ordering during peak times;
  3. Interesting descriptions should be given to seasonal offers but jargon that customers can’t understand should be avoided.

Using this advice, most restaurant operators should be able to find something to celebrate during the Christmas period. Now is the perfect time to maximise menu profitability using seasonal produce, while showcasing the concept and keeping the brand relevant. It’s about helping customers feel the Christmas spirit and making the restaurant their destination of choice for the season.

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