The selling price of your lunch dishes determines whether you make a profit or lose money. Many lunch businesses estimate their prices, which causes them to unknowingly lose money. Setting...
Setting lunch prices is like tuning a guitar - one string off and the whole melody sounds wrong. Too many lunch spots wing their pricing and watch profits disappear without knowing why. Getting the numbers right means every plate served actually makes you money.
Your lunch pricing strategy can make or break your restaurant's bottom line. Guess wrong, and you'll watch money walk out the door with every order.
Gather all ingredient costs
List every single ingredient that goes into your lunch dish. Those tiny extras you barely think about? They add up faster than you'd expect.
💡 Example: Club sandwich
Ingredient costs per serving:
- 3 slices of bread: €0.45
- 100g chicken: €1.80
- 2 slices of bacon: €0.60
- Lettuce, tomato, cucumber: €0.40
- Mayonnaise, butter: €0.25
- Fries (200g): €0.80
Total ingredient costs: €4.30
Don't skip the garnish, seasonings, or that drizzle of olive oil. Small ingredients sneak up on your costs when you're not watching.
Determine your desired food cost percentage
Lunch dishes work well with food costs between 25% and 32%. This keeps roughly one-third of your selling price for ingredients - and that's your ceiling.
- 25-28%: Simple dishes (soup, sandwich)
- 28-32%: Complex lunch plates (salads, hot entrees)
- Above 35%: You're in the red
⚠️ Note: Always work with selling prices excluding VAT. Your menu shows prices with 9% VAT added for food items.
Calculate your minimum selling price
This formula tells you exactly what to charge for your target margin.
Formula: Minimum selling price = Ingredient costs ÷ (Food cost % ÷ 100)
💡 Example: Club sandwich calculation
Ingredient costs: €4.30
Target food cost: 30%
Step 1: Minimum price excl. VAT
€4.30 ÷ 0.30 = €14.33
Step 2: Price incl. 9% VAT
€14.33 × 1.09 = €15.62
Menu price: €15.60 (rounded)
Check the market price and competition
Your calculated price sets your minimum, not your maximum. Now test it against reality.
- What do nearby competitors charge?
- Does it fit your restaurant's positioning?
- Will customers actually pay this amount?
If your calculated price feels too steep for the market, you can:
- Switch to more affordable ingredients
- Trim portions slightly
- Remove the dish entirely
⚠️ Note: Never price below your calculated minimum. You lose money on every single sale.
Update prices as costs change
Suppliers bump prices constantly. Review your calculations every 3 months to stay profitable.
💡 Example: Impact of price increase
Your club sandwich ingredients now cost €4.80 instead of €4.30.
- New minimum price: €4.80 ÷ 0.30 = €16.00 excl. VAT
- Incl. VAT: €17.44
- Menu price needs to increase to €17.40
Real-world example: Lunch café "De Hoek"
Sarah owns a downtown lunch spot and wants to add Caesar salad. She runs the numbers methodically:
Ingredient costs Caesar salad:
- Romaine lettuce (150g): €0.65
- Grilled chicken (120g): €2.10
- Parmesan cheese (25g): €0.80
- Croutons: €0.35
- Caesar dressing: €0.30
- Bread with herb butter: €0.55
Total costs: €4.75
Sarah aims for 28% food cost on this salad. Her calculation: €4.75 ÷ 0.28 = €16.96 excl. VAT. With VAT added, that's €18.49. She rounds to €18.50.
After checking local competitors, Sarah finds similar salads priced between €16.50 and €19.50. Her €18.50 price fits perfectly with her quality-focused positioning.
Food cost percentages by dish type
Different lunch categories need different food cost targets. One size doesn't fit all:
- Soups (22-26%): Broth-based dishes with vegetables keep costs lower
- Rolls and sandwiches (25-30%): Meat and cheese fillings drive costs up
- Salads (28-32%): Fresh produce and proteins cost more
- Hot dishes (30-35%): Complex prep and premium ingredients
From analyzing actual purchasing data across different restaurant types, these ranges stay consistent across corner cafés and upscale bistros alike.
Common pricing calculation mistakes
1. Forgetting small ingredients
Salt, pepper, oils, spices, and condiments seem insignificant but can add €0.50-€1.00 per dish. These "invisible" costs destroy margins when ignored.
2. Calculating with VAT-inclusive prices
Many owners use the full customer price in their food cost calculations. This makes your percentages look better than they really are, leading to money-losing prices.
3. Not factoring in waste
Add 3-5% to ingredient costs for spoilage. Produce goes bad, prep gets messed up, and plates get sent back sometimes.
4. Calculate once, never revisit
Ingredient prices fluctuate monthly. Without regular updates, your food costs can balloon to 40% or higher while you're not looking.
5. Inconsistent portion sizes
If your kitchen staff serves different amounts each time, your calculations become meaningless. Set clear portion standards and spot-check regularly.
Summary
Proper lunch pricing requires a methodical approach: calculate every ingredient cost, set your target food cost percentage (25-32% for lunch), apply the formula, then validate against market rates. Update prices quarterly as costs shift and avoid common pitfalls like overlooking small ingredients or including VAT in calculations. This system ensures each dish contributes to profits rather than eroding them.
How do you calculate the selling price? (step by step)
Add up all ingredient costs
List all ingredients in your dish and their costs per serving. Don't forget garnishes, sauces, side dishes, or oil. Everything that goes on the plate counts.
Choose your desired food cost percentage
For lunch, this is usually between 25-32%. Simple dishes can go to 25%, more extensive lunch to 30-32%. Never go above 35%.
Calculate your minimum price
Divide your ingredient costs by your desired food cost percentage. This gives you the minimum selling price excl. VAT. Multiply by 1.09 for the price incl. VAT.
Compare with the market
Check if your calculated price is realistic for your target audience and location. Adjust ingredients or portions if needed, but never sell below your minimum.
✨ Pro tip
Calculate the exact food costs for your 4 highest-volume lunch dishes from this past week. Any dish hitting 34% or above is costing you €200-400 monthly in lost profits.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Was this article helpful?
Frequently asked questions
Should I include VAT in my cost price calculation?
No, always calculate with prices excluding VAT. You calculate food cost based on your net selling price, not what your customer pays including VAT.
What if my calculated price is too high for the market?
Then use cheaper ingredients, serve smaller portions, or remove the dish from your menu. Never sell below your cost price - you'll lose money on every plate.
How often should I check my prices?
Review every 3 months to verify your ingredient costs remain accurate. Suppliers raise prices regularly, which increases your food cost without you noticing.
Why is 30% food cost a solid guideline?
At 30% food cost, 70% remains for staff, rent, energy, and profit. This gives most restaurants enough room to stay profitable while covering all expenses.
Should I also count the time of my chef?
No, labor costs aren't included in food cost - you calculate those separately. Food cost is purely the percentage that goes toward ingredients.
What happens if I ignore waste and spillage in my calculations?
You'll underestimate true costs by 3-5%, turning profitable dishes into money losers. Always add a waste factor to account for spoilage and kitchen mistakes.
📚 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.
Calculate it yourself with KitchenNmbrs
All the formulas you learn here — KitchenNmbrs calculates them automatically. Enter your ingredients and instantly see your food cost, margin, and selling price. Try it free for 14 days.
Start free trial →