Managing food cost increases is like playing a three-way balancing act between portion size, menu price, and profit margins. Most restaurant owners instinctively shrink portions first, but that's often the wrong move. Smart operators know there's a better way to handle these increases.
Calculate the impact of a 10% price increase
Before you touch your portions, figure out what this increase actually costs you. A 10% jump in ingredient costs doesn't equal a 10% profit hit.
💡 Example:
Your 250-gram steak cost €5.00 per portion. Now it's €5.50 (+10%).
- Previous food cost: €5.00 on €29.36 = 17.0%
- Current food cost: €5.50 on €29.36 = 18.7%
- Impact: 1.7 percentage points higher
Per year at 2,000 portions: €1,000 less profit
Option 1: Reduce portion size
Shrinking portions keeps your ingredient costs per plate identical. But here's the catch: customers notice this fast, especially with proteins.
💡 Calculate new portion size:
To maintain identical ingredient costs:
- Original portion: 250 grams × €20/kg = €5.00
- Current price: €22/kg (+10%)
- Adjusted portion: €5.00 / €22 = 227 grams
Difference: 23 grams less per plate (-9.2%)
⚠️ Watch out:
Reduced portions can trigger unhappy customers and poor reviews. Balance this risk against your cost savings.
Option 2: Increase selling price
Bumping your menu price lets you keep portions unchanged and maintain your food cost percentage. This approach is usually more honest than secretly cutting portions.
💡 Calculate new selling price:
To preserve 17.0% food cost:
- Current ingredient costs: €5.50
- Target food cost: 17.0%
- Adjusted selling price excl. VAT: €5.50 / 0.17 = €32.35
- Updated menu price incl. VAT: €32.35 × 1.09 = €35.26
Price increase: from €32.00 to €35.26 (+10.2%)
Option 3: Combination of both
A mixed approach often works better: trim portions slightly and raise prices modestly. This spreads the impact and makes changes less obvious. A pattern we see repeatedly in restaurant financials shows this strategy maintains customer satisfaction while protecting margins.
- Portion 5% smaller: from 250g to 238g
- Price 5% higher: from €32.00 to €33.60
- Result: identical profitability, minimal visible change
Which option to choose?
Your decision depends on your restaurant type, competition, and clientele:
- Fine dining: increase the price, preserve quality
- Casual dining: modest combination of both
- Fast casual: portion slightly smaller, maintain price
- Delivery: price increases work better (less direct comparison)
⚠️ Watch out:
Always research your competitors before increasing prices. If you're charging €35 and they're at €28, you'll lose business.
Monitor the results
After implementing your changes, track what happens next:
- Portions sold: are sales dropping?
- Customer feedback: complaints about portion sizes?
- Overall profit: are you earning more or less total?
Sometimes accepting lower margins temporarily beats losing customers. Always calculate the full impact on your yearly revenue.
How do you adjust portion size when prices increase? (step by step)
Calculate your current food cost per dish
Add up all ingredient costs and divide by your selling price excl. VAT. Multiply by 100 to get the percentage. This is your starting point.
Calculate the impact of the price increase
Multiply your current ingredient costs by 1.10 (for a 10% increase). Calculate your new food cost percentage with these higher costs.
Choose your strategy: portion, price, or combination
Decide whether you'll reduce the portion, raise the price, or do both. For each option, calculate the consequences for your food cost and guest experience.
Test and monitor the results
Implement the change and track for 4-6 weeks whether your sales volumes decline. Adjust if needed based on guest feedback and revenue figures.
✨ Pro tip
Track your top 3 protein dishes weekly for 30 days after any adjustment. If food costs on these items stay under 32%, you've protected 75% of your profit margin.
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
Will customers notice if I reduce portions by 9%?
With proteins like steak or chicken, absolutely. With sides like fries or vegetables, much less likely. A 23-gram reduction in steak is obvious, but 10 grams less rice usually isn't.
Should I adjust my entire menu at once or dish by dish?
Focus on your top 5 revenue-generating dishes first since they drive most of your profit. You can tackle less popular items in the following weeks. This approach minimizes disruption while maximizing financial impact.
How do I explain price increases without losing customers?
Be transparent about rising costs but emphasize quality and value. Frame it as 'We're adjusting prices to maintain the exceptional ingredients and service you expect.' Honesty builds more trust than excuses.
📚 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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