Food bars: A creative approach to maximize profits

The increasing popularity of self-service food bars poses many new operational challenges for the restaurant industry. The primary area arises in pricing since there are no restrictions on the number of times customers can refill their plates. The most commonly used method is to first choose a price the target market will bear, and then select menu items that fit the price, while leaving a reasonable profit for the operation. However, the maximum profit may not be achieved using this approach. The authors develop a technique for determining the price that maximizes profits for any combination of food bar menu items, given their relative popularity and unit cost structures. The method is based on the popular Shelf Allocation for Retailer’s Profit Model (SHARP), and analysis of data is performed using a Microsoft Excel spreadsheet.