Every quarter, restaurant owners miss thousands in profit because their prices haven't caught up with rising costs. Suppliers bump their rates 2-3 times yearly, yet many menus still reflect last year's numbers. Here are the warning signs your pricing needs an immediate update.
Signal 1: Your food cost is rising without a clear reason
The most obvious warning sign? Rising food cost percentages. If you haven't touched your recipes or portions, but food cost jumps from 30% to 35%, your purchase prices have increased while selling prices stayed flat.
? Example:
Your steak had a food cost of 32% last year:
- Ingredients: €9.60
- Selling price: €30.00 excl. VAT
- Food cost: 32%
Now the same meat costs €12.00, but you're still selling it for €30.00:
- Ingredients: €12.00
- Selling price: €30.00 excl. VAT
- Food cost: 40%
You're now losing €2.40 per steak compared to last year.
Signal 2: Your profit is declining despite stable revenue
Same guest count. Same average check size. But profit keeps shrinking? That's your margins bleeding out. From analyzing actual purchasing data across different restaurant types, this pattern shows up most clearly in monthly comparisons.
- Same number of guests as last year
- Same average bill amount
- But less profit left over
Check your total monthly food cost percentage. Has it crept from 30% to 34%? Your margins are evaporating dish by dish.
Signal 3: Your competitors can offer cheaper prices
If nearby restaurants serve comparable dishes at lower prices, two scenarios are possible: they've secured better supplier deals, or you haven't adjusted prices while they have. Neither scenario favors you.
⚠️ Note:
Don't just compare menu prices, but also portion size and quality. A cheaper competitor might use smaller portions or different ingredients.
Signal 4: Your supplier raised prices, you didn't
Suppliers send updated price lists regularly. Many owners delay menu updates, fearing customer backlash. But your margin disappears faster than customers do.
? Example calculation:
Your supplier raised beef from €18 to €22 per kilo (+22%). You sell 100 steaks of 250 grams per week:
- Extra cost per steak: €1.00
- Per week: €100 extra costs
- Per year: €5,200 less profit
If you don't adjust your price, you lose €5,200 per year on this one dish.
How often should you check your prices?
Review your food costs quarterly minimum. Focus on your 5 top-selling dishes first - they drive 80% of revenue. Get those right, and you've fixed most problems.
- Monthly: Total food cost of your restaurant
- Per quarter: Food cost of your top dishes
- When prices change: Calculate immediately for your menu
The psychology behind prices that are too low
Fear of customer exodus keeps many owners from raising prices. But you're walking away from profit while customers barely notice modest increases. A €2 bump per dish often flies under the radar, yet generates thousands annually.
? Calculation example:
You sell 50 main courses per day, 6 days a week. A price increase of €2 per dish:
- Per day: €100 extra revenue
- Per week: €600 extra revenue
- Per year: €31,200 extra revenue
Even if 10% of your customers stay away, you still keep €25,000 per year.
How do you check if your prices are still correct? (step by step)
Calculate your current food cost
Take your 5 best-selling dishes. Add up all ingredient costs and divide by your selling price excl. VAT. Multiply by 100 to get the percentage.
Compare with last year
Check if your food cost is higher than 12 months ago. An increase of more than 2 percentage points often means your prices are falling behind.
Calculate new selling prices
For any food cost above 35%: divide your ingredient costs by 0.30 for a healthy margin of 30%. Multiply by 1.09 for the price incl. VAT.
✨ Pro tip
Track food cost percentages on your top 3 dishes every 6 weeks. If any dish hits 36% or higher, you've waited too long to adjust pricing.
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 an acceptable food cost for restaurants?
How do I prevent customers from leaving when I raise prices?
How do I quickly calculate what a new price should be?
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
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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