The effect of loss leader pricing on restaurant menus' product portfolio analysis

Eli Cohen, Richard Ghiselli, Zvi Schwartz

Research output: Contribution to journalArticlepeer-review

15 Scopus citations


Drawing from economic and consumer behavior theories, this study outlines four theoretical reasons for menu item dependency, asserting that the assumption of item independency is violated in menu-related product portfolio analysis. A case study of actual restaurant figures from two consecutive periods is analyzed. The data demonstrate how one such item dependency, namely loss leader pricing, affects the way in which the performance of several dishes is portrayed by two types of menu engineering models: the traditional, matrix-based approach and the multidimensional menu mix model. The results underscore the need for a better menu product portfolio model, one that adequately addresses the interdependent nature of restaurants' product portfolio.

Original languageEnglish
Pages (from-to)21-38
Number of pages18
JournalJournal of Foodservice Business Research
Issue number1
StatePublished - 19 Mar 2007


  • Loss leader pricing
  • Menu product portfolio analysis
  • Restaurant profitability

ASJC Scopus subject areas

  • Food Science


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