How many fewer dishes can you sell after raising prices while keeping the same profit? Most restaurant owners fear that higher prices automatically mean lower profits. But the math often tells a different story.
Why this calculation matters
Say you're currently selling 100 main courses per day for €24.00 and you're considering raising it to €27.00. The question is: how many dishes do you need to sell to achieve the same absolute profit?
This calculation helps you to:
- Set realistic expectations
- Determine whether a price increase is profitable
- Adjust your marketing strategy
- Reduce stress about declining cover numbers
The formula for break-even volume
The formula to calculate how much you need to sell after a price increase:
New volume = (Current volume × Current margin per item) / New margin per item
💡 Example:
You currently sell 100 pastas per day for €18.50 (incl. 9% VAT):
- Current price excl. VAT: €16.97
- Ingredient costs: €5.50
- Current margin: €16.97 - €5.50 = €11.47
- New price: €21.00 incl. VAT = €19.27 excl. VAT
- New margin: €19.27 - €5.50 = €13.77
New volume: (100 × €11.47) / €13.77 = 83 pastas
So you can sell 17% less and keep the same profit!
What if you want to make more profit?
If you don't just want to maintain the same profit but earn more, adjust the formula:
New volume = Desired total profit / New margin per item
💡 Example profit increase:
Current situation: 100 × €11.47 = €1,147 profit per day
Desired: €1,300 profit per day
New margin: €13.77
Required sales: €1,300 / €13.77 = 94 pastas
6% fewer sales, but 13% more profit!
Taking fixed costs into account
This calculation focuses on the direct margin per dish (selling price minus ingredient costs). Your fixed costs like rent, staff, and utilities remain the same.
⚠️ Heads up:
If you sell significantly less, your total coverage of fixed costs will decline. So also check your overall break-even point after the price increase.
Practical tips for price increases
- Test with a limited number of dishes: Start with your most popular items
- Communicate the value: Explain why you're raising prices (better ingredients, service)
- Monitor the first few weeks: Track how much you actually sell
- Prepare your staff: They'll be getting feedback from guests
💡 Real-world example:
From analyzing actual purchasing data across different restaurant types, establishments like The Golden Spoon often see surprising results. They raised their main courses from €22 to €25:
- Before: 150 covers/day × €4.50 margin = €675
- After: 125 covers/day × €7.50 margin = €937
Result: 17% fewer guests, 39% more profit
When a price increase doesn't work
A price increase won't work if:
- You lose more than 50% of your volume
- Competitors are much cheaper for comparable quality
- Your target audience is very price-sensitive
- The increase is disproportionate to the value offered
In those cases, it's smarter to first lower your costs or adjust your concept before raising prices.
How do you calculate the required volume after a price increase?
Calculate your current margin per dish
Subtract your ingredient costs from your current selling price (excl. VAT). This is your margin per dish that covers your fixed costs and profit.
Calculate your new margin after the price increase
Subtract the same ingredient costs from your new selling price (excl. VAT). Note: if you're also using better ingredients, include those additional costs.
Apply the break-even formula
Divide your current total profit (volume × margin) by your new margin per item. The result is the minimum you need to sell to maintain the same profit.
✨ Pro tip
Run this calculation for your 3 highest-margin dishes first over a 2-week test period. You'll often find these items have the most pricing flexibility without losing customers.
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 calculate with prices including or excluding VAT?
Always calculate excluding VAT for your margin calculations. You'll be remitting the VAT anyway, so it doesn't count toward your profit.
What if I lose much more than calculated?
Then the price increase was too large or poorly timed. Consider a partial rollback or compensate with added value (better service, larger portions).
How do I know if my price increase is successful?
Monitor your total profit per day/week. If it stays the same or increases despite lower volume, your price increase is working.
What if my ingredient costs are also rising?
Include the increased ingredient costs in your new margin calculation. Often that's the reason for a price increase in the first place.
📚 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.
Save up to 15% on your food cost
Most kitchens save 8-15% on food cost as soon as they start measuring. KitchenNmbrs makes measuring simple. Start your free trial today and see the difference.
Start free trial →