That beloved pasta dish everyone orders for €14.50 but only nets you €3 profit? That's a classic Plow Horse - high popularity, low profitability. You can boost its margins with a price increase, but first you need to calculate the real impact on your bottom line.
What exactly is a Plow Horse?
Menu engineering sorts dishes into 4 categories based on popularity and profitability. A Plow Horse is a dish that:
- Gets ordered frequently (high popularity)
- Generates little profit (low profitability)
- Drives revenue but crushes your margin
Picture that popular pasta for €14.50 where you barely keep €3, yet guests order it constantly.
Why raising the price on a Plow Horse is risky
Adjusting a Plow Horse requires finesse. Go too high and you'll lose customers. Too conservative and the problem remains.
⚠️ Heads up:
With a popular dish, even a modest price bump can dramatically impact your total revenue. Always crunch the numbers before making changes.
The formula for margin impact calculation
For accurate calculations you'll need this data:
- Current selling price (excl. VAT)
- Current cost price per portion
- Number of sales per week/month
- New selling price (excl. VAT)
- Expected decline in sales (percentage)
The core formula is:
New margin per month = (New selling price - Cost price) × New number of sales
💡 Example calculation:
Current situation of a popular pasta:
- Selling price: €13.30 excl. VAT (€14.50 incl. 9% VAT)
- Cost price ingredients: €4.80
- Current margin per portion: €8.50
- Sales: 200 portions per month
- Current monthly margin: €1,700
Scenario analysis: different price increases
Always test multiple scenarios to find the sweet spot. Here are three potential increases for our pasta:
💡 Scenario 1: €1.00 increase
- New price: €14.30 excl. VAT
- New margin per portion: €9.50
- Expected decline: 10% (180 portions)
- New monthly margin: €1,710
- Impact: +€10 per month
💡 Scenario 2: €2.00 increase
- New price: €15.30 excl. VAT
- New margin per portion: €10.50
- Expected decline: 20% (160 portions)
- New monthly margin: €1,680
- Impact: -€20 per month
Estimating elasticity: how many customers will you lose?
The trickiest part is predicting customer loss - something most kitchen managers discover too late affects their calculations more than ingredient costs. Use these benchmarks:
- 5-10% increase: typically 5-15% fewer sales
- 10-15% increase: typically 15-25% fewer sales
- 15%+ increase: typically 25%+ fewer sales
For signature or beloved dishes, elasticity might be lower. For easily replaceable items, it could be higher.
Alternative strategies for Plow Horses
Price hikes aren't your only option. Consider these approaches:
- Reduce cost price: cheaper ingredients or smaller portions
- Upselling: push side dishes or beverages
- Menu placement: position less prominently
- Seasonal adjustments: only offer when ingredients cost less
⚠️ Heads up:
Trial price increases for a few weeks first. Track your sales figures daily and adjust if the impact is too severe. Some guests need time to adapt.
Digital tools for margin monitoring
Manually tracking sales figures and margins per dish eats up valuable time. An app like KitchenNmbrs shows you the impact of price changes on your food cost and margin per dish instantly.
You can model different price scenarios before implementing them, then monitor how your sales and margins evolve afterward.
How do you calculate the margin impact of a price increase?
Gather your current figures
Note the current selling price excl. VAT, cost price per portion and number of sales per month of your Plow Horse. These figures are your starting point for all calculations.
Determine your new pricing strategy
Choose 2-3 different price increases to test (e.g. €1, €1.50 and €2). Calculate the new selling price excl. VAT and the new margin per portion for each scenario.
Estimate the sales decline
Determine for each price scenario what percentage less sales you expect. Use as a guideline: 5-10% increase = 5-15% less sales. Calculate the new number of portions per month.
Calculate the new total margin
Multiply for each scenario the new margin per portion by the new number of sales. Compare this with your current monthly margin to see the impact.
Choose the best scenario and test
Implement the scenario with the highest total margin. Monitor your sales figures daily in the first few weeks and adjust if the impact is larger than expected.
✨ Pro tip
Test your Plow Horse price increase during a 2-week trial period on weekdays only. Track daily sales volumes and calculate the margin impact after exactly 10 business days before deciding on a permanent change.
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 much can I increase a Plow Horse without losing customers?
A safe increase is typically between 5-10% of the current price. For a dish of €15 that's €0.75 to €1.50. Always test a smaller increase first before going further.
Should I include VAT in my margin calculation?
No, always calculate excl. VAT. The VAT on your menu (9% for food) goes to the tax authority and doesn't count toward your margin. Divide your menu price by 1.09 for the price excl. VAT.
What if my Plow Horse becomes less popular after the increase?
That's normal and expected. As long as your total margin per month increases, the increase is successful. Do monitor whether other dishes compensate for the revenue.
Is it better to lower the cost price instead of raising the price?
Both strategies work. Lowering cost price has less risk of customer loss, but can affect quality. Price increases maintain quality but can reduce sales.
How often should I evaluate my Plow Horse prices?
Check your menu performance at least quarterly. If ingredient prices rise or you notice a Plow Horse becoming even more popular, you can adjust more frequently.
What's the maximum price elasticity I should expect for comfort food dishes?
Comfort foods like pasta or burgers typically show 15-20% sales decline for every 10% price increase. Customers have strong price memories for familiar dishes they order regularly.
📚 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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