The menu is key to any restaurant’s success, whether it’s a chain or a standalone, large or small. New customers may be drawn in by a unique name, or a fantastic location, but it’s the food that keeps them coming back. Any changes you make to your menu should be carefully examined. With this being said, every restaurant menu should be revised on a regular basis to account for changes in food prices and inflation. Yearly menu revisions allow for pricing modifications, the integration of popular cuisine trends, and the culling of non-selling items. It is normally suggested to update your restaurant’s menu at least once a year. If you’re a more seasonal restaurant, you might change out new food options as much as four times a year.

To understand which approach works best for your restaurant, keep reading!

Perform a Menu Analysis First

The goal of menu analysis is to figure out how your restaurant is doing in terms of pricing and performance. It delves into every aspect of your menu, from the visual design to the psychology and calculated math that goes into creating it. The fundamental goal of the analysis is to determine the popularity and profitability of each item. The outcomes will help you determine how you should go in order to improve your overall success.

You can build a new plan to boost your profit margins if you have data on your sales, profitability, customer base, and popular things to work with. Changing the design of your menu, tweaking prices based on a variety of factors, utilizing client psychology, and adjusting the meals you provide may all be part of your strategy.

Here are a couple of reasons why a menu analysis should be done on a frequent basis.

Keeping Up with Customer Trends

Your profits are generated by your customers. It’s critical to pay attention to their demands and requirements because they’re the reason you’re still in business. You may see what consumers are most commonly purchasing by paying attention to the trends and focusing on them.  Consumer preferences are constantly shifting, so being up to date on current trends is essential if you want to succeed.

Keeping Up with the Competition and Pricing

Outside sources should also be considered when analyzing menus. It’s critical to understand how your pricing compares to that of your competitors. Consider lowering your prices on things that are widely available elsewhere, such as burgers. Customers may seek out your competitors if you charge an excessive markup. Understanding how your restaurant runs is crucial to creating a menu that is well-designed. You may accommodate customer preferences while maintaining focus on money matters by combining the cost of the things you sell with pricing that works well in your market. Moreover, when you examine trends in your surrounding market, you’ll also be able to see what your competitors are doing well and what requests aren’t being met. You will be able to use this information later to improve your own menu and get ahead of your competition.

Why Should You Update Your Menu?

Now, after performing a menu analysis, you might find out that your restaurant is operating properly. When it comes to your menu, you may think “if it isn’t broken, why fix it?”. Here are a couple of reasons why you should consider updating your menu.

To Give Your Customers Something New

It’s usually a good idea to offer something new to your clients. It broadens the scope of your restaurant, demonstrating that you can adapt to shifting consumer preferences and expectations. This will strengthen your regulars’ loyalty because they’ll notice that you’re doing everything you can to keep them happy.

To Accommodate for Labor Costs

The restaurant industry is unquestionably saturated. Holding on to labor, or your restaurant crew, might be tough in this situation. If your employees are unhappy with their wages or working circumstances, they will not hesitate to leave for another restaurant, potentially right around the corner.

In order to keep your employees and motivate them to perform well, financial compensation has to be competitive. Hence, you’ll need to adjust the salaries accordingly and possibly raise them. Overspending in any area of your restaurant could lead to its collapse, therefore you’ll need to decrease costs elsewhere. This way you can afford to raise the minimum wage by implementing productive adjustments that increase your profit margins. You can also streamline your menu by developing a solid program that allows your kitchen staff to complete orders more quickly.

To Keep Up with Food Costs

The most compelling reason to review your restaurant menu at least once a year is to keep food expenses under control. Food prices have risen dramatically since 2006, according to this multi-year data from Food prices are currently among the highest they’ve ever been in 2020. So what to do? Rather than sharply increasing the prices, look at your menu.

Now, how often should you update your menu? There are two approaches:

Updating Your Menu and Price Levels Once a Year

A restaurant menu should be revised at least once a year to ensure that food costs remain consistent. The price of a menu item in relation to the cost of the food needed to produce that same dish is referred to as food costs. So, how do you decide on the price levels of your meals? The price of raw materials impacts how much a restaurant may charge for the final product. Fast food menus can often reduce meal costs by as much as 25%, although fast, casual, and family type concepts are typically more expensive. Food prices should be around 30-35 percent of total costs. There is no specific menu price formula, but the general guideline looks like this.

It means that if a dish costs $2.50, you must charge at least $6.50 to cover the cost and earn a profit. This may appear to be a significant increase, but keep in mind that the price includes more than just the food. You’re paying your employees to make the food, serve it, and clean up after it. Everything in your restaurant must be covered, from salary to the electric cost. Higher-priced commodities, such as cattle and fresh seafood, frequently have a higher markup. This higher food cost can be countered by including lower-priced menu produce. And other commodities, such as carbohydrates and seasonal vegetables, will have extremely cheap food costs. The typical food cost in your business should be between 30-35 percent. So, if you serve one pricey cut of beef filet, you can easily offset the expense with two or three economical entrée options, such as chicken tacos, pork tenderloin, etc.

Food prices also fluctuate depending on the season and external circumstances, which can drive up prices. So you will have to adjust your menu price formula accordingly.

An annual approach works best if your restaurant isn’t focused on seasonal changes. It is entirely up to you when that time of year occurs. Perhaps you start over in January or wait until your restaurant’s anniversary to make changes.

Updating Your Menu Seasonally

It may be necessary to update ingredients for cold and warm seasons depending on where your restaurant is located. When the weather warms up, choose for lighter fare like fresh salads, cold soups, and grilled meats instead of substantial stews, pot pies, and roasted meats. It doesn’t mean you have to change everything on your menu, but clients will welcome a few seasonal additions. If you change your menu seasonally, you’ll need to maintain one season’s menu active for around four months. This can be a lot of going back and forth, so consider changing the menu twice a year instead. 

A couple of reasons to consider updating your menu seasonally are cutting on food costs and supporting local producers. Because of their abundance, some seasonal foods may be less expensive than other menu items depending on the season and your location. It makes sense to alter similar products depending on the season to cut costs (for example, summer squash and butternut squash). Moreover, seasonal foods are a great way to get started on or expand your partnership with local farmers and providers. Seasonal vegetables or even meats from local farms, depending on location and temperature, are good menu choices. Letting your customers know that their meals contain products sourced from local producers not only speaks to the freshness and quality of the ingredients (and the freshness of the menu), but it also reestablishes your restaurant’s role as a community contributor, which always adds positivity to your restaurant’s image.


Reviewing your menu is an excellent opportunity to consider seasonal foods, current culinary trends, and portion size while reviewing your food costs and menu prices. Individual menu item usage reports are easy with a menu management software. This will show you how many menu items you sold in the previous season or year. Look for things on your menu that aren’t selling as well as others and decide whether or not to keep them. What are the best-selling items? Is there a way to make things more interesting? Do you need to expand your menu to persuade customers to come back? How many items should be on a restaurant menu?

Whether you decide to go with the yearly or seasonal review approach comes down to your restaurant’s individuality. Regardless, doing this will show significant improvement on your restaurant margins.