Compare your prices to 3-5 similar restaurants, calculate food costs for your bestsellers, test price changes on new items first, and monitor guest reactions closely. Aim for food costs under 32% while staying competitive in your market.
Restaurants with perfectly calibrated prices thrive while others struggle to fill seats or turn a profit. The difference? Smart operators regularly audit their pricing against both market reality and customer expectations. Most owners price once and forget, missing shifts in costs, competition, and guest behavior.
Check your current position versus competitors
Start with an honest comparison. Visit 3-5 similar establishments in your area and examine their menus closely. Pay attention not just to prices, but portion sizes, quality, and atmosphere too.
💡 Example:
You're a bistro and your main course costs €24.50. At competitors you see:
- Competitor A: €22.00 (smaller portion)
- Competitor B: €26.50 (comparable)
- Competitor C: €28.00 (slightly more upscale feel)
You're positioned well in the middle.
Don't photograph menus in restaurants, but jot down prices afterward. Check their websites for complete listings. Focus specifically on:
- Prices of similar dishes to yours
- Portion sizes (ask servers if unclear)
- Ingredient quality (organic, local, premium brands)
- Overall atmosphere and service level
Analyze your own costs and margins
Before adjusting anything, you need to know what dishes actually cost you. Many operators guess at this, but the numbers often shock them.
💡 Example calculation:
Your steak at €28.00 (incl. 9% VAT):
- Selling price excl. VAT: €25.69
- Ingredient costs: €9.20
- Food cost: 35.8%
That's running high. Most bistros target under 32%.
Calculate the food cost of your 5 top-selling dishes with this formula:
Food cost % = (Ingredient costs / Selling price excl. VAT) × 100
⚠️ Note:
Always calculate using prices excluding VAT. Your menu shows prices with 9% VAT included. Divide by 1.09 to get the base price.
Test your guests' reaction
Price adjustments feel risky, but you can test them strategically. Start with new dishes or seasonal items to gauge customer response without touching established favorites.
Watch for these warning signs:
- Declining orders of higher-priced items
- Price questions from regular customers
- Increased orders of budget alternatives
- Direct feedback about value for money
💡 Real-world example:
A restaurant bumped pasta prices from €16.50 to €18.50. After 4 weeks:
- 15% drop in pasta sales
- 20% increase in pizza orders (cheaper option)
- Overall revenue remained flat
Result: the jump was too aggressive for their clientele.
Review your revenue figures per dish
Some menu items can handle price increases while others can't. This is a pattern we see repeatedly in restaurant financials - certain dishes have loyal followings regardless of cost, while others become price-sensitive quickly.
Pull these reports from your POS system:
- Which dishes generate highest weekly sales volume?
- Which items produce the most total revenue?
- Which dishes get ordered as part of combinations?
- Which items rarely move?
Consider different pricing strategies
You don't need to raise everything uniformly. Different dishes can support different pricing approaches based on customer attachment and perceived value.
💡 Smart distribution:
- Signature dishes: can handle 10-15% premiums
- Customer favorites: increase cautiously (maximum 5%)
- Slow movers: fix the dish first or eliminate it
- Daily specials: more flexibility for higher pricing
Don't overlook psychological pricing either. €19.50 feels significantly cheaper than €20.00, despite the tiny 50-cent gap.
How do you check if your prices fit? (step by step)
Gather competitor information
Visit 3-5 similar establishments in your area. Note prices, portion sizes, and quality of comparable dishes. Also check their websites for complete menus.
Calculate your actual food cost
Add up all ingredient costs for your 5 best-selling dishes. Divide by the selling price excl. VAT and multiply by 100 for the percentage.
Analyze your sales figures
Check in your POS system which dishes sell the most and what revenue each dish generates. Watch for trends from the past 3 months.
Test carefully with small adjustments
Start with new dishes or seasonal specials to test higher prices. Monitor guest reactions and sales figures for 4-6 weeks.
Evaluate and adjust where needed
Compare revenue before and after price adjustments. If a dish sells 20% less but is 15% more expensive, you still earn less. Adjust then.
✨ Pro tip
Track your top 5 dishes' profit margins weekly and compare competitor prices monthly during slow periods. Set alerts for when your food costs exceed 33% - that's your early warning system.
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Frequently asked questions
How often should I check my prices?
At least twice yearly, plus immediately after major cost increases. Supplier prices shift regularly, so review with each new price list you receive.
What if my prices are higher than competitors?
Higher prices work if you deliver superior value - better ingredients, larger portions, exceptional service, or unique dishes. Make sure guests understand what they're paying for.
Can I raise all prices at once?
That's risky. Test price increases on 20% of your menu first and monitor guest reactions. Popular items need more careful handling than specialty dishes.
How do I know if a price increase was too aggressive?
If sales drop 20% after a 10% price increase, you've pushed too hard. Also watch for customer complaints and shifts toward cheaper menu items.
Should I account for different target audiences?
Absolutely. Lunch crowds often watch prices more closely than dinner guests. Business diners behave differently than families. Tailor your approach accordingly.
What if my food cost is too high for competitive prices?
Focus on cost reduction first - negotiate with suppliers, adjust portion sizes, or substitute ingredients. Pricing yourself out of the market isn't sustainable.
Do seasonal menu changes affect pricing strategy?
Yes, seasonal items often command premium pricing since they feel special and limited-time. Guests expect to pay more for seasonal specialties than year-round staples.
📚 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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