Menu Intelligence
What is cannibalization on a restaurant menu?
Cannibalization is when a new item, promotion, or price change pulls sales away from a brand's own existing items rather than generating new demand. A limited-time offer that sells ten thousand units has not added ten thousand sales if most of its buyers would otherwise have ordered a full-price item — the launch number is gross, and the business impact is net.
Cannibalization hides in plain sight because launch reporting celebrates the new item's sales without asking where they came from. The honest read compares total category and basket economics before and after: what happened to the items the new one competes with, and whether average contribution per transaction went up or down.
Some cannibalization is fine and even intentional — trading customers up to a higher-margin version of what they already buy. It becomes a problem when a lower-margin item displaces a higher-margin one, which is precisely the pattern value-priced LTOs fall into if nobody measures the net.
Why it matters
New-item decisions made on gross sales systematically overrate launches. Measuring cannibalization is the difference between an LTO strategy that builds contribution and one that runs an expensive treadmill of self-displacement.
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