Last month, a steakhouse owner discovered he was losing €18,000 annually after beef prices jumped 15%. Many entrepreneurs don't adjust their selling prices and unknowingly lose thousands of euros per year. Calculate exactly what impact a price increase has and how to smartly adjust your menu.
Calculate the impact per dish
Start with your best-selling dishes. These create the biggest dent in your total profit.
? Example:
Pasta carbonara - selling 150 portions per month:
- Old ingredient costs: €6.50
- New ingredient costs: €6.50 × 1.15 = €7.48
- Extra cost per portion: €0.98
- Extra cost per month: €0.98 × 150 = €147
Annual impact: €1,764 in extra costs
Calculate your new food cost percentage
Your food cost automatically increases if you keep selling prices unchanged. Check if you're still within your desired margin.
? Example:
Steak selling for €32.00 (€29.36 excl. VAT):
- Old ingredient costs: €9.00 (30.7% food cost)
- New ingredient costs: €10.35 (35.2% food cost)
- Food cost increase: 4.5 percentage points
Your margin dropped from 69.3% to 64.8%
⚠️ Watch out:
If your food cost climbs above 35%, you're probably losing money on that dish. Price adjustment becomes necessary.
Determine your new selling prices
Calculate what selling price you need to maintain your desired food cost. One of the most common blind spots in kitchen management is assuming small percentage increases won't hurt - but they compound quickly across your entire menu.
Formula: New selling price excl. VAT = New ingredient costs ÷ (Desired food cost ÷ 100)
? Example:
Pasta carbonara - maintain 30% food cost:
- New ingredient costs: €7.48
- Calculation: €7.48 ÷ 0.30 = €24.93 excl. VAT
- New menu price: €24.93 × 1.09 = €27.17
- Old menu price: €23.50
Price increase needed: €3.67 (15.6%)
Create an impact overview of your entire menu
Sort your dishes by impact to set priorities. Dishes with high sales and high cost increases get tackled first.
- High priority: Best-sellers with food cost above 35%
- Medium priority: Average sales, food cost 32-35%
- Low priority: Low sales, food cost still below 32%
? Example total impact:
Restaurant with 15 dishes, averaging 100 covers/day:
- Extra costs per day: €45
- Extra costs per month: €1,350
- Extra costs per year: €16,200
Without price adjustment you lose €16,200 per year
Phased price adjustment strategy
Don't raise all prices at once. That's too obvious to guests. Spread it over 2-3 months.
- Month 1: Raise your 5 best-selling dishes
- Month 2: Raise 5 dishes with highest food cost
- Month 3: Raise remaining dishes if needed
⚠️ Watch out:
Test guest reaction after each round. Sometimes you can raise prices more than expected, sometimes you need to get creative with portion sizes or side dishes.
A food cost calculator automatically calculates your new food cost percentages and immediately shows which dishes need priority. That way you see at a glance where action is needed.
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How do you calculate the impact step by step?
Gather current ingredient costs
Write down the exact ingredient costs of your 10 best-selling dishes. Add everything up: main ingredients, garnishes, sauces and oil. This becomes your basis for the calculation.
Calculate new costs per dish
Multiply each ingredient cost by 1.15 (for 15% increase). Then calculate your new food cost percentage: (new costs ÷ selling price excl. VAT) × 100.
Determine impact on annual basis
Multiply the extra cost per portion by the number of portions sold per month × 12. This gives you the total annual impact per dish.
Calculate new selling prices
For dishes above 35% food cost: divide new ingredient costs by desired food cost (e.g. 0.30 for 30%). Multiply by 1.09 for price including 9% VAT.
Create a priority list
Sort dishes by total annual impact (extra costs × portions sold). Start price adjustments with the dishes with the biggest financial impact.
✨ Pro tip
Run your calculations within 24 hours of receiving supplier notifications, then implement changes over 8-10 weeks maximum. Quick action prevents profit erosion from snowballing across multiple purchasing cycles.
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
Do I need to raise all prices at once?
What if my food cost goes above 40%?
How do guests react to price increases?
Can I absorb the price increase instead of passing it to customers?
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
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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