A dish is priced too high if your food cost comes in above 35-40% or if your selling price is far above market rates. Many restaurant owners estimate this, but it can cost you hundreds of euros per month. Learn exactly how to check if your prices are right.
Ever wonder if that pasta dish is quietly bleeding your profits dry? A dish is priced too high if your food cost comes in above 35-40% or if your selling price is far above market rates. Many restaurant owners estimate this, but it can cost you hundreds of euros per month.
Check your food cost percentage
The first indicator is your food cost. This is the percentage of your selling price that goes to ingredients. If this is too high, you're not making enough profit on the dish.
💡 Example:
You sell a pasta carbonara for €18.50 (incl. 9% VAT).
- Selling price excl. VAT: €18.50 / 1.09 = €16.97
- Ingredient costs: €6.80
- Food cost: (€6.80 / €16.97) × 100 = 40.1%
This is too high. Standard for restaurants is 28-35%.
Food cost formula:
Food cost % = (Ingredient costs / Selling price excl. VAT) × 100
⚠️ Note:
Always calculate with the price excl. VAT. The price on your menu is incl. VAT. For restaurants that's 9%.
Compare with market prices
Even if your food cost is right, your price could still be too high for the market. Check what similar restaurants in your area charge for comparable dishes.
- Look at 3-5 comparable restaurants in your area
- Pay attention to the level (fine dining vs. casual)
- Check online menus and delivery platforms
- Ask guests what they pay elsewhere
If your price is more than 20% above average, it's probably too high. Unless you clearly offer more value (larger portion, better quality, unique location).
💡 Example market check:
Your steak costs €32. Comparable restaurants:
- Restaurant A: €28
- Restaurant B: €30
- Restaurant C: €26
- Restaurant D: €29
Average: €28.25. Your price is 13% higher. That can work, but check if you offer more value.
Watch for signals from guests
Your guests often tell you indirectly if you're too expensive. Watch for these signals - it's the kind of thing you only learn after closing your first month at a loss:
- Fewer orders of expensive dishes: If your signature dish suddenly gets ordered less
- More questions about prices: Guests asking more often "what do you get for that?"
- Lower average bills: People ordering cheaper alternatives
- Fewer new guests: Word-of-mouth becomes more negative at high prices
Check your profit margin
Besides food cost, you have other expenses. Your total margin needs to be enough to cover staff, rent, energy, and profit.
💡 Example total costs:
Steak sale €32 (€29.36 excl. VAT):
- Ingredients: €9.50 (32% food cost)
- Staff (30% of revenue): €8.81
- Other costs (25% of revenue): €7.34
- Total costs: €25.65
Profit: €3.71 per dish (12.6%)
A healthy profit margin for restaurants is between 8-15%. If you're below that, your dish might be priced too low, not too high.
Test with temporary promotions
Unsure if your price is right? Test it carefully:
- Increase by 5-10% and see what happens to sales
- Temporarily offer more value for the same price (larger side dish, extra sauce)
- Create a cheaper alternative of the same dish (smaller portion)
⚠️ Note:
Test price changes carefully. A sudden 20% increase can scare off guests. Better to increase twice by 10% with a few months in between.
By following these steps, you'll get a complete picture of your dish pricing. Always combine your food cost, market prices, and guest reactions for the best decision.
How do you check if a dish is priced too high? (step by step)
Calculate your food cost percentage
Add up all ingredient costs and divide by your selling price excl. VAT. Multiply by 100 for the percentage. Above 35% usually means too little margin.
Check market prices at competitors
Look at 3-5 comparable restaurants in your area. Note their prices for similar dishes. If you're more than 20% more expensive, check why.
Monitor guest reactions and sales figures
Watch for declining sales of the dish, more price questions from guests, or lower average bills. These are signals your price is too high.
Calculate your total profit margin
Subtract from your selling price: ingredients, staff costs, and other costs. Your profit margin should be at least 8-12% to be healthy.
Test carefully with small adjustments
Increase or decrease your price by 5-10% and monitor the effect on sales. Or offer more value for the same price to test if guests are satisfied.
✨ Pro tip
Track your 4 most expensive dishes for 2 weeks straight. If guests consistently ask "what comes with that?" on any dish, you've found your overpriced item.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
What is a normal food cost for restaurants?
A standard food cost for restaurants is between 28-35%. Above 35% it becomes difficult to make enough profit after staff and other costs.
Should I calculate with prices including or excluding VAT?
Always excluding VAT for food cost calculations. The price on your menu is including 9% VAT, but you calculate your food cost with the price excluding VAT.
How do I know if my competitor is really comparable?
Look at location, atmosphere, service level, and portion size. A restaurant in the city center can charge more than one in the suburbs. Fine dining can charge more than casual dining.
What if my food cost is right but guests think it's too expensive?
Then your price might be above what the market is willing to pay. Consider offering more value (larger side dish, better quality) or adding a cheaper alternative.
Can I just increase my price if it's too low?
Increase carefully in steps of 5-10%. A sudden large increase can scare off guests. Test the effect on your sales first.
How do I handle seasonal price fluctuations for ingredients?
Build a 5-10% buffer into your food cost calculations during peak seasons. Some chefs switch to seasonal alternatives rather than absorbing huge cost spikes.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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