Your menu pricing can make or break your restaurant's profitability, yet most owners rely on guesswork or quick glances at nearby competitors. This approach either leaves money on the table or prices you out of the market entirely. Here's how to systematically compare your prices with actual competition and identify adjustment opportunities.
Collect competitive data systematically
Start by mapping out your direct competitors. These aren't all restaurants in the area, but those with a comparable concept, price-quality ratio and target audience.
💡 Example:
You run a bistro with average main courses around €22. Your competitors are:
- Bistro A: €18-26 for main courses
- Restaurant B: €20-28 for main courses
- Brasserie C: €16-24 for main courses
The pizzeria at €12 and the Michelin restaurant at €45 aren't direct competitors.
Create a spreadsheet with at least 5 comparable establishments. Note per competitor:
- 3-5 comparable main courses with prices
- Average appetizer price
- Average main course price
- Average dessert price
- Prices of popular drinks
Calculate your market position
Now that you have competitive data, calculate where you stand. This reveals if you're overpriced, underpriced, or positioned correctly.
💡 Example calculation:
Steak prices in your area:
- Bistro A: €28
- Restaurant B: €32
- Brasserie C: €26
- Bistro D: €30
- Your price: €24
Average competitor: €29. You're €5 below average.
Calculate for each dish:
- Lowest competitor price
- Highest competitor price
- Average competitor price
- Your current price
- Difference from average (+ or -)
⚠️ Note:
Compare apples to apples. A 200-gram steak isn't the same as a 300-gram one. Also pay attention to side dishes and garnishes that are or aren't included.
Check your food cost versus market room
Knowing you're cheaper isn't enough. You also need to verify if you're actually making money at current prices, and if you have room to adjust.
For each main course calculate:
- Your ingredient costs (including side dishes, sauce, oil)
- Your food cost % = (ingredient costs / selling price excl. VAT) × 100
- Maximum price according to market (highest competitor)
- Potential food cost at that price
💡 Example:
Your steak:
- Your price: €24 (€22.02 excl. VAT)
- Ingredient costs: €8.50
- Current food cost: 38.6% (too high!)
- Highest competitor: €32
- At €32: food cost would be 29.1%
Conclusion: you have room for a price increase and better margin.
Analyze the reason behind price differences
If you deviate significantly from the average (more than 15% higher or lower), look for the reason. From tracking this across dozens of restaurants, the patterns become clear quickly.
Possible reasons for lower prices:
- Smaller portions than competitor
- Less luxurious ingredients
- Simpler preparation or presentation
- Lower rent/location costs
- Deliberate pricing strategy (volume model)
Possible reasons for higher prices:
- Better quality ingredients
- Larger portions
- More service or ambiance
- Unique concept or specialization
- Higher location costs
⚠️ Note:
Being cheaper doesn't guarantee more guests. If your food cost exceeds 35%, you're not earning enough per plate to cover your other costs.
Determine your price adjustment strategy
Based on your analysis, you can now decide which dishes to adjust. Not everything needs to change at once.
Prioritize dishes that:
- Are ordered frequently (biggest impact on revenue)
- Have high food cost (>35%)
- Have lots of room in the market (you're far below competitor)
💡 Practical example:
Of your 12 main courses you adjust 4:
- Steak: €24 → €28 (+€4)
- Salmon: €22 → €25 (+€3)
- Pasta: €16 → €18 (+€2)
- Chicken: €19 → €21 (+€2)
At 200 of these dishes per month = €2,200 extra revenue.
How do you compare your prices with the competition? (step by step)
Identify your direct competitors
Make a list of 5-7 restaurants with comparable concept, target audience and price-quality ratio. Visit them in person or check their online menus.
Collect price data systematically
Note from each competitor the prices of at least 5 comparable dishes. Pay attention to portion sizes and what is or isn't included.
Calculate averages and your position
Calculate per dish what the lowest, highest and average competitor price is. Compare this with your current prices.
Check your food cost at current and potential prices
Calculate your current food cost percentage and what it would be at the average or highest competitor price. This shows your margin room.
Prioritize which prices you adjust
Start with dishes that are ordered frequently, have high food cost and have lots of room in the market. Don't change everything at once.
✨ Pro tip
Track your top 3 competitors' daily specials for 30 days and note which dishes appear most frequently. These repeating specials often reveal their highest-margin items and give you insight into profitable price points.
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 competition?
Check the prices of your 3 main competitors at least quarterly. If new establishments open nearby or there are major economic changes, do it more frequently.
What if I'm structurally more expensive than my competitors?
Then you need to make the added value clear: better quality, larger portions, more service or unique dishes. Or lower your food cost by shopping smarter.
Can I raise all prices at once?
Better not. Start with your most popular dishes that have lots of room. Roll out changes gradually over 2-3 months.
How do I explain price increases to guests?
Be honest about rising costs, but focus on quality and value. You could introduce a new dish at the old price as an alternative.
What if my food cost is good but I'm cheaper than competitors?
Then you have room for a price increase without worsening your margin. Extra profit can be invested in better ingredients, marketing or a reserve fund.
What's the difference between pricing for lunch versus dinner menus?
Lunch customers expect faster service and lower prices, typically 20-30% less than dinner. But they also order fewer courses, so your per-plate profit margins need to work harder.
📚 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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