Your best-selling dish may be one of your weakest earners on delivery. Once the platform takes its commission and you pay for the box, the item that fills the most orders is not always the one that leaves the most money behind. Menu engineering means checking that item by item, then deciding what to protect, reprice, bundle or drop.
The short version: work out what each item contributes after food, packaging and commission, using the price without VAT. Set that against how often the item sells. The two numbers show you where to look first.
Start with contribution margin for each item
Contribution margin is what an item earns after the costs that come with selling it. It stops before costs you pay anyway, such as rent and salaried staff, so it is not net profit.
Take VAT out first. Prices for taxable supplies in the UAE are generally shown including VAT (Mondaq explains the legal basis), and the standard rate is 5%. That VAT is not your revenue, so divide the app price by 1.05 before anything else. Then count what rises with each sale: food cost per portion, packaging, platform commission, discounts you fund yourself and any other cost that goes up with every order. Leave out rent, utilities and salaries you pay whatever you sell, and count labour only where an item adds a real extra cost.
Your commission rate, and whether it is charged on the VAT-inclusive or VAT-free price, depend on your agreement. This guide uses 25% of the VAT-free price as a placeholder. It is not any platform’s rate.
Worked example 1: one item, step by step
Illustrative example. Replace with your own figures.
| Chicken rice bowl | AED |
|---|---|
| Price on the app (including 5% VAT) | 42.00 |
| Revenue without VAT (42.00 ÷ 1.05) | 40.00 |
| Food cost | −12.00 |
| Packaging | −2.50 |
| Commission (placeholder 25% × 40.00) | −10.00 |
| Contribution after the costs listed | 15.50 |
That is 38.8% of the VAT-free revenue. Counted: food, packaging, commission. Not counted: fixed costs, and other variable costs such as funded discounts or incremental labour, which these examples assume are zero. So we call the result “contribution after the costs listed”. If commission were charged on the VAT-inclusive price, it would be AED 10.50 and the contribution AED 15.00.
Sort your menu with the menu engineering matrix
The menu engineering method, credited to Michael Kasavana and Donald Smith, asks two questions about every item: does it sell often, and does it earn well each time? That gives four groups. Stars sell often and earn well. Plowhorses sell often but earn little per sale. Puzzles earn well but sell rarely. Dogs do neither.
Two lines draw the boxes. An item counts as popular if it takes at least 70% of the share an even split would give it. With six items, an even split is 16.7%, so the line is 11.7% of units. High-earning means above the weighted average contribution per item sold. The 70% line is a convention of the method, not a universal rule.
Worked example 2: six delivery items
Illustrative example. Same assumptions as example 1, using one month of orders.
| Item | Price (AED) | Contribution per item (AED) | Units | Share of units | Group |
|---|---|---|---|---|---|
| Chicken rice bowl | 42.00 | 15.50 | 420 | 34.9% | Star |
| Beef burger | 52.50 | 17.50 | 300 | 24.9% | Star |
| Falafel wrap | 21.00 | 9.00 | 330 | 27.4% | Plowhorse |
| Mixed grill platter | 105.00 | 25.50 | 70 | 5.8% | Puzzle |
| Lamb mandi | 84.00 | 28.00 | 60 | 5.0% | Puzzle |
| Grilled fish plate | 63.00 | 11.00 | 25 | 2.1% | Dog |
Total contribution is AED 18,470 across 1,205 items sold, so the weighted average is AED 15.33 per item. The popularity line is 11.7%.
The falafel wrap has the best margin percentage on the list (45%), yet it earns only AED 9.00 a sale, so it is a Plowhorse. The lamb mandi earns AED 28.00 but sells 60 times a month. The labels tell you where to look, not what to do, and they are fragile. The chicken bowl clears the average by just AED 0.17. If its food cost rose by AED 0.50, the average would fall to AED 15.15, the bowl would drop to AED 15.00 and become a Plowhorse. Treat the matrix as a starting point.
- Stars: protect them. Keep recipe, portion and stock steady.
- Plowhorses: try a small price rise, a cheaper pack, or an add-on that lifts what each order earns.
- Puzzles: ask whether price, portion size or suitability for delivery is the problem, then test one change. Our guide to why restaurants get views but not orders covers how the item appears on the app.
- Dogs: candidates for removal, but check the maths first (see below).
Set delivery prices on purpose
Dine-in, with no commission, the bowl contributes AED 28.00 (40.00 − 12.00), ignoring packaging and service costs; on delivery it contributes AED 15.50. Matching AED 28.00 would need an app price of AED 59.50, 41.7% above AED 42.00. That shows the size of the gap. It is not a recommendation to charge it.
Whether you can price delivery differently depends on your agreement with each platform. Careem’s partner FAQ says it takes price parity seriously and that prices found to be higher than your own menu or other delivery platforms could lead to removal from the platform. The page is undated and other platforms differ, so check your own terms; this is not legal advice. Our guide to common aggregator management mistakes covers how to check contract terms.
For any price change, ask how many sales you can lose before you are worse off. Raise the bowl by 10% to AED 46.20 and its contribution rises from AED 15.50 to AED 18.50. Total contribution only falls if bowl sales drop by more than 16.2% (1 − 15.50 ÷ 18.50), assuming your costs and commission rate stay the same.
Build bundles, modifiers and add-ons that add contribution
Rank extras by contribution, not price. A free extra sauce that costs AED 0.70 loses money every time a customer ticks it, while a soft drink priced AED 10.50 that costs AED 2.50 contributes AED 5.00 under the same assumptions.
Worked example 3: does a bundle add contribution?
Illustrative example. A bundle of bowl, soft drink and dessert sells for AED 63.00, against AED 73.50 bought separately, so it is 14.3% cheaper. Revenue without VAT is 63.00 ÷ 1.05 = AED 60.00. Subtract food (12.00 + 2.50 + 5.00 = 19.50), packaging (2.50 + 1.00 = 3.50) and commission (25% × 60.00 = 15.00), and the contribution after the costs listed is AED 22.00.
Whether that is good depends on what the customer would otherwise have bought. If they would have bought the bowl only (AED 15.50), the bundle adds AED 6.50. If bowl and drink (AED 20.50), it adds AED 1.50. If all three at full price (AED 29.50), it loses AED 7.50. If the only two alternatives were bowl alone or all three at full price, the bundle breaks even when 46.4% of buyers would have bought all three anyway (6.50 ÷ (6.50 + 7.50)).
Do not treat 46.4% as a rule. It rests on this example’s assumptions: no new customers or extra orders from the bundle, costs and commission as listed, and delivery fees and repeat orders ignored. Check your own numbers against order data once a bundle is live. For discounts rather than bundles, our guide to increasing Talabat orders profitably shows how to set a break-even target.
Trim the menu using contribution, not slogans
“Fewer choices sell more” is a common line, but the evidence does not support a blanket rule. A 2010 meta-analysis of choice-overload studies found a mean effect of virtually zero, so decide item by item.
To test a removal, subtract the contribution you recover from customers who switch to something else from the contribution you lose. The fish plate contributes AED 11.00 × 25 = AED 275 a month. If 40% of its buyers (10 customers) switch to the chicken bowl, you recover 10 × 15.50 = AED 155, so AED 120 of net contribution is lost each month. Removing it only helps if it saves more than AED 120 a month in avoidable costs, such as waste. The 40% switching rate is an assumption.
Measure whether the change worked
Record four weeks of units and contribution per item as a baseline, change one thing at a time, and compare like with like (the same weekdays, allowing for Ramadan, public holidays and the summer slowdown). Careem’s partner FAQ gives an expected timeline of 7 working days for menu changes, so allow for delay.
Illustrative example. Baseline for the bowl: 420 units × AED 15.50 = AED 6,510. After the price rise to AED 46.20: 400 units × AED 18.50 = AED 7,400. Contribution is up AED 890 even though units fell 4.8%. One good month is not proof, so repeat the comparison.
In your dashboard: Deliveroo Hub’s Items Sold report shows item names, quantity, price before discounts and subtotal for the dates you choose, and its Orders report shows Deliveroo’s commission and the VAT on it. noon Food’s dashboard lists best-selling items with order counts and revenue. Neither help page names the UAE, so check what yours shows. Contribution per item is a manual calculation: price ÷ 1.05 − food − packaging − commission − other variable costs.
FAQ
What is menu engineering for food delivery?
It sorts your menu by how often each item sells and how much it contributes per sale. For delivery, count food, packaging and commission, using the price without VAT, to see which items to protect, reprice, bundle or review.
Is contribution margin the same as profit?
No. Contribution margin is what an item earns after the variable costs you listed, before fixed costs such as rent and salaried staff. An item can contribute well while the business still loses money.
Put it into practice
Costing a full menu across several delivery apps by hand is slow. Secret Sauce helps UAE restaurants cost their menus item by item, test pricing and bundle changes, and track the results across the delivery apps. Want to understand where your restaurant is losing orders or margin? We can help you identify the gaps through a Restaurant Delivery Performance Audit, a one-time review that ends in a clear plan of what to improve first. Contact us at hello@secretsauce.ae.