Market price products like fresh fish make pricing tricky. One day you pay €18 per kilo, the next day €25. Many restaurant owners just guess, but that costs you money. In this article you'll learn how to systematically handle fluctuating purchase prices.
Why market price products are difficult
With market price products, your purchase costs change constantly. If you don't adjust your menu price, your food cost varies from 25% to 45% on the same dish. That's unsustainable for your profitability.
💡 Example:
You sell sea bass fillet for €28.00 (incl. 9% VAT):
- Selling price excl. VAT: €25.69
- At €20/kg purchase: food cost 31%
- At €30/kg purchase: food cost 47%
Difference: 16 percentage points!
Three strategies for market price products
There are three ways to handle this. Each strategy has pros and cons:
Strategy 1: Fixed margin with variable price
You keep your food cost percentage constant and adjust your selling price daily. This gives the best profitability but requires more communication with guests.
💡 Example calculation:
Desired food cost: 30%
- Purchase €20/kg → selling price €24.24 excl. VAT → €26.42 incl.
- Purchase €30/kg → selling price €36.36 excl. VAT → €39.64 incl.
Formula: Selling price excl. VAT = (Ingredient costs / Food cost %) × (1 + VAT%)
Strategy 2: Fixed price with variable margin
You keep your menu price constant and accept fluctuating margins. This is easiest for guests but risky for your profit.
⚠️ Watch out:
With this strategy you can unknowingly lose money on dishes. Check weekly that your food cost doesn't exceed 40%.
Strategy 3: Hybrid approach
You work with a bandwidth. Within certain limits you accept fluctuating margins, beyond that you adjust the price.
- Food cost between 28-35%: price stays the same
- Food cost above 35%: price goes up
- Food cost below 25%: possibly lower price for competitiveness
Practical implementation per strategy
For strategy 1 (fixed margin)
You need daily contact with your supplier for current prices. Calculate your new selling price every morning and communicate this to your team.
💡 Practical example:
Restaurant De Pier works this way with fresh fish:
- 9:00 - Supplier calls with daily prices
- 9:15 - New prices calculated and written on board
- Service informed about changes
For strategy 2 (fixed price)
Monitor your average food cost weekly. If it consistently exceeds 35%, you need to adjust your fixed price.
For strategy 3 (hybrid)
Check the purchase price daily and calculate your food cost. Only adjust the price for extreme fluctuations.
Communication with guests
Transparency works best. Guests understand that fresh fish varies in price daily, if you explain it honestly.
- On the menu: "Sea bass of the day - market price"
- Service: "Fresh sea bass is €28.50 today"
- Chalkboard: Daily fresh fish with current prices
⚠️ Watch out:
Always mention that these are market prices. Guests who are surprised by a different price than expected won't come back.
Which strategy fits your business?
The choice depends on your target audience and concept:
- Fine dining: Strategy 1 (fixed margin) - guests accept market prices
- Bistro/brasserie: Strategy 3 (hybrid) - balance between stability and profit
- Casual dining: Strategy 2 (fixed price) - guests want certainty
A system like KitchenNmbrs can help you quickly calculate new prices and track your food cost, regardless of which strategy you choose.
How do you set prices for market price products?
Choose your strategy
Decide whether you work with fixed margins (price varies), fixed prices (margin varies) or a hybrid approach. This depends on your concept and target audience.
Calculate your complete cost price
Add up all ingredients: main product, garnish, sauces, oil. Don't forget to account for trim loss with fish and meat.
Determine your selling price
With fixed margin: divide cost price by desired food cost percentage. With fixed price: check that your food cost stays below 35%.
Communicate clearly to guests
Mention on your menu that these are market prices. Have your service staff state the current price before guests order.
Monitor and adjust
Check your average food cost weekly. If there are structural deviations, adjust your strategy or base price.
✨ Pro tip
Keep a log of purchase prices and your chosen selling prices. After a month you'll see patterns and can better estimate when price adjustments are needed.
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
How often should I adjust my prices with market price products?
That depends on your strategy. With fixed margins daily, with fixed prices only for extreme fluctuations. The hybrid approach is somewhere in between.
What is an acceptable food cost for fish dishes?
For fresh fish, 28-35% is standard. Due to trim loss and spoilage, this is often higher than other products. Above 40% becomes difficult.
How do I explain fluctuating prices to guests?
Be transparent: "Our fish is daily fresh and the price depends on the catch." Mention this on your menu and always have service staff state the current price.
Can I combine market price products with fixed dishes?
Yes, many restaurants do this. Fixed dishes provide stability, market price products provide flexibility. Just make sure there's a clear distinction on your menu.
What if my supplier gives the price late?
Make agreements about timing. Many restaurants receive prices by 10:00, so they can still adjust. Otherwise work with a hybrid model with more bandwidth.
Should I include VAT in my cost price calculation?
No, always calculate with prices excluding VAT. Your menu price is including 9% VAT, but for food cost you calculate: ingredient costs divided by selling price excl. VAT.
📚 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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