Supplier price hikes hit your margins harder than you think, especially if you're not tracking them dish by dish. Most restaurant owners discover they're earning 25% less per plate only after their monthly numbers come in. But there's a simple way to spot profit killers before they drain your bank account.
Why this matters
Suppliers bump their prices 2-4 times yearly. Sometimes it's 5%, other times 15% or more. Skip adjusting your menu and watch your profit per dish vanish. A year later you've gone from 30% to 40% food cost without even knowing it.
⚠️ Heads up:
An increase from 30% to 35% food cost means a loss of €25,000 per year on €500,000 in revenue.
The price control overview
Build a list of your 10 top-selling dishes. For each one, track:
- Current selling price (excl. VAT)
- Real ingredient costs (using today's purchase prices)
- Food cost percentage
- Last price adjustment (when did you last update your menu?)
Dishes hitting above 35% food cost need your attention. Above 40%? You're bleeding money.
💡 Example overview:
Steak with fries - selling price €29.36 excl. VAT:
- Steak 200g: €6.40 (was €5.60)
- Fries 250g: €0.85
- Vegetables: €1.20
- Sauce: €0.45
Total ingredients: €8.90
Food cost: 30.3% (was 28.1%)
Red flags that demand price adjustments
Watch for these warning signs in your overview:
- Food cost creeping above 35%: This dish isn't pulling its weight
- No price changes in 6+ months: Suppliers have definitely raised their rates
- Wild variations between dishes: Some at 25%, others hitting 40%
- Shrinking profit margins: You're making less than last year
And here's something you only learn after closing your first month at a loss: the dishes that feel most profitable often aren't. That signature pasta everyone loves? It might be costing you €2 per plate because you haven't updated the cheese price in eight months.
💡 Example calculation for new price:
Ingredients now €8.90, you want 30% food cost:
New minimum price: €8.90 ÷ 0.30 = €29.67 excl. VAT
On menu: €29.67 × 1.09 = €32.34 incl. VAT
Timing your reviews
Check this overview every 3 months. Suppliers typically send price increases quarterly. Regular reviews stop you from hemorrhaging money for months straight.
Some owners handle this manually in Excel. Others use tools that automatically calculate how price increases affect your food cost.
⚠️ Heads up:
Always calculate with prices excl. VAT. The price on your menu (€32) must be divided by 1.09 to get the price excl. VAT (€29.36).
Priority dishes for adjustment
Target your best-selling dishes with inflated food costs first. A dish you sell 100 times weekly with 5% excessive food cost hurts more than one you sell 10 times with 10% excessive cost.
Fix your top 5 dishes first. That'll solve 80% of your profit leak.
How do you create a price control overview?
List your top 10 dishes
Check your POS system and see which dishes sell the most. Note the current selling price of each dish (as it appears on your menu).
Calculate actual ingredient costs
Add up all ingredients at current purchase prices. Don't forget: sauces, garnishes, oil, butter - everything that goes on the plate.
Calculate food cost percentage
Divide ingredient costs by selling price excl. VAT and multiply by 100. Above 35% is too high for most restaurants.
Mark problem dishes
Dishes above 35% food cost deserve attention. Check when you last adjusted the price - often it's been months.
Calculate new prices
For dishes with too high food cost: divide ingredient costs by desired food cost (e.g. 0.30 for 30%). That's your new minimum price excl. VAT.
✨ Pro tip
Run this price check within 48 hours of receiving invoices from your top 3 suppliers. You'll instantly spot which price hikes are about to crush your margins.
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 check my prices?
Every 3 months works well for most restaurants. Suppliers typically raise prices quarterly, so this prevents months of profit loss on individual dishes.
What food cost percentage should I target?
Most successful restaurants maintain food costs between 28% and 35%. Above 35% makes it tough to cover labor, rent, and other expenses while staying profitable.
Do I need to analyze every single dish?
Start with your 10 highest-volume dishes since they drive most of your profit. Once you've optimized those, you can tackle the rest of your menu.
How do I calculate the right menu price?
Divide your ingredient cost by your target food cost percentage (example: €9 ÷ 0.30 = €30 excl. VAT). Then multiply by 1.09 for 9% VAT to get your menu price: €32.70.
What if customers resist my price increases?
Price bumps of €1-2 usually go unnoticed. If questioned, simply explain that rising supplier costs forced the adjustment. It's better than operating at a loss.
Should I raise prices on low-volume dishes too?
Focus on high-volume items first since they impact your bottom line most. Low-volume dishes can wait unless their food cost exceeds 40%.
Can I just estimate food costs instead of calculating exactly?
Estimates often miss the mark by 2-3%, which costs €10,000-15,000 annually on €500,000 revenue. Precise calculations protect your margins much better.
📚 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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