Labor shortages and supply chain issues are wreaking havoc on c-store operations.
Tom Cook, King-Casey
As a result of COVID, a perfect storm has hit convenience stores. Labor shortages and supply chain issues are wreaking havoc on daily operations, sales and profitability. One way to effectively deal with this is through menu simplification.
A simplified menu can drive down operational cost by lessening some work in the kitchen and reducing product ingredients and inventory levels. It can also help operators meet the convenience needs of today's c-store customers through improvement in speed of service.
Menu simplification is the critical first step toward optimizing your menu. In its most basic form, menu simplification results in a pared-down menu through the reduction of SKUs. In other words, fewer menu items that your staff must prepare.
To ensure you do this correctly, it is crucial when simplifying your menu that the process be driven by consumer insights and data. By doing so, menu item decisions will be based on knowledge and analytics. Subjectivity and guesswork — so often part of the process— will be minimized, if not eliminated.
There are numerous benefits gained from a simplified menu, and they are immediate and direct. These include:
Less funds tied up in product inventory;
A simpler and more agile product supply chain;
A less complex menu for employees and staff to execute, thereby improving speed of service; and
An easier menu for guests to comprehend, which will speed up the ordering process and increase customer satisfaction.
A sound way to simplify your menu is through a multi-pronged approach.
Three indispensable tools are:
Conducting a menu operations analysis to develop operations data and product complexity ratings for each menu item. This analysis enables you to determine the menu items that are adding to or detracting from throughput and profitability.
Undertaking research among consumers to assess their attitudes toward current menu items. This will be essential in understanding and prioritizing consumer order behavior and identifying and diagnosing their price/value perceptions.
Utilizing an exceptional research instrument that delivers multiple menu-optimization benefits: a TURF analysis. TURF, an acronym for Total Unduplicated Reach and Frequency, is a mathematical procedure for optimizing sets of choices. In simple terms, TURF provides two types of information: the shortest list of menu items needed to satisfy the vast majority of customers, and the average number of items that each customer would find on that list that they might like to order.
For example, a fast-casual client had 37 core items on its menu. A TURF analysis revealed the menu could be reduced to 25 items (a 33-percent reduction) and still give 91 percent of guests their 1st or 2nd choice of menu item. Moreover, those guests would have multiple reasons to return — on average, they would find 2.2 of their preferred choices available on the menu.
Within the contexts of the lists mentioned previously, TURF demonstrates the potential changes to customer satisfaction by making substitutions to the optimum solutions. For instance, if food operations say it is too labor intensive to keep offering a particular menu item, TURF can show what other items might be substituted with minimal downside to customer satisfaction.
In addition, a TURF analysis can be run for an entire menu in aggregate or based on individual menu components (e.g., separately identifying the optimum salad choices, the optimum entrees, the best list of soups, the best desserts, etc.). And by appropriately adding questions about price/value, a TURF analysis can also provide important direction for finetuning pricing.
Taken together, menu simplification built around a TURF analysis delivers multiple benefits:
Identification and ranking of menu items that generate incremental reach;
Identification of revenue-driver menu items (items that are price elastic and can withstand price increases);
Determination of items that drive customer loyalty;
Streamlined menu through retirement of specific products that have little consumer affinity;
Faster and easier customer ordering through the reduction and simplification of menu items;
Increased customer throughput as a result of reduced order times;
Operational complexity improvements due to streamlined menu;
Reduction in service time through elimination of labor-intensive menu items;
Assessment of new product ideas to determine those with the strongest potential for expanding customer base; and
Utilization of data to optimize menu layout and merchandising of menu categories and items.
TURF is a highly worthwhile undertaking capable of producing significant benefits that your brand will profit from.
Menu simplification has become a necessity since COVID hit and the dilemma it has caused. However, astute convenience store brands and operators will keep pursuing menu simplification as an essential growth strategy beyond COVID to drive lower operational costs, improve profitability, and meet the convenience needs of consumers.
If you haven't already, the time to simplify your menu is now.
Tom Cook is a principal of King-Casey. For more than half a century, King-Casey has been helping restaurant and foodservice brands grow their businesses and dramatically improve the customer experience. King-Casey provides a complete range of menu optimization services, including assessment, research, menu reengineering, menu strategy, and menu communications.
Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.