PLOWHORSE
Plowhorses are items that are relatively popular but they yield lower gross margins than the average gross margin for the menu. Plowhorse items are often demand generators and are important to the operation's appeal to the price conscious market segment. It is for this reason that they often referred to as "leader" menu items.
Decision actions for plowhorse items include:
- Test for price sensitivity. If an item is highly price sensitive, only pass through minimal increases to this item's menu price or consider passing some of the item's cost increase on to a "superstar". Closely monitor any negative effect on demand. It is important to note that at times managers are more resistant to price increases than are the consumer.
- Relocate non-signature, plowhorse items to a low profile position on the menu boards and service line.
- Consider combining plowhorse items with lower cost products to achieve a greater gross margin. Essentially, merchandise highly popular items by packaging them as "blue plate specials" with lower cost foods to increase the item's overall gross margin while keeping its strong MM% appeal.
- Consider a portion reduction as long as the change does not produce a noticeable change in the demand for this item.