Picture this: your signature beef steak sells for €30 but costs €14 in ingredients alone - that's a 47% food cost that's quietly draining your profits. Most restaurant owners know their menu prices by heart, but they're flying blind on actual ingredient costs. Here's how to build a complete internal price list that shows your true cost price, margins, and selling price for every dish.
What's on an internal price list?
A solid internal price list breaks down each dish into:
- Cost price: what all ingredients cost together
- Food cost percentage: how much percent of your selling price goes to ingredients
- Margin in euros: how much you keep per dish
- Selling price excl. VAT: what you charge without tax
- Selling price incl. VAT: the price on your menu
💡 Example price list line:
Steak with fries and salad:
- Cost price: €8.50
- Selling price excl. VAT: €27.52
- Selling price incl. VAT: €30.00
- Food cost: 30.9%
- Margin: €19.02 per dish
Gather all cost prices per dish
Start with your 10 most popular dishes. Break down each one into:
- Main ingredient (meat, fish, vegetables)
- Side dishes (potatoes, rice, vegetables)
- Sauces and dressings
- Garnish and decoration
- Oil, butter, spices
- Bread and butter beforehand
⚠️ Watch out:
Don't skip the small stuff like olive oil, salt, pepper and herbs. Those 15 cents per dish add up to hundreds of euros annually.
Calculate food cost and margins
For each dish, you'll need these formulas:
Food cost % = (Cost price ingredients / Selling price excl. VAT) × 100
Margin in euros = Selling price excl. VAT - Cost price ingredients
💡 Example calculation:
Pasta carbonara - menu price €18.50:
- Selling price excl. VAT: €18.50 / 1.09 = €16.97
- Cost price ingredients: €5.10
- Food cost: (€5.10 / €16.97) × 100 = 30.1%
- Margin: €16.97 - €5.10 = €11.87
Make your price list clear
Organize your dishes in a spreadsheet with these columns:
- Dish name
- Cost price ingredients
- Selling price excl. VAT
- Selling price incl. VAT (menu)
- Food cost %
- Margin €
- Sales per week (quantity)
- Total margin per week
Sort by food cost percentage from high to low. Any dish above 35% food cost needs immediate attention. This is one of the most common blind spots in kitchen management - dishes that look profitable on paper but actually drain your bottom line.
💡 Example problem dish:
Salmon fillet - sells 25x per week:
- Cost price: €12.00
- Selling price: €28.00 incl. VAT = €25.69 excl.
- Food cost: 46.7% (way too high!)
- Loss per week: 25 × (€12.00 - €8.50) = €87.50
- Loss per year: €4,550
Update your price list regularly
Supplier prices shift constantly. Check monthly:
- Are your purchase prices still accurate?
- Which dishes now exceed your target food cost?
- Which menu prices need adjusting?
Digital tools make updates easier than Excel files. You change purchase prices once, and all calculations update automatically.
⚠️ Watch out:
Always use selling prices excluding VAT for food cost calculations. Menu prices include 9% VAT for food items.
How do you create an internal price list? (step by step)
List your best-selling dishes
Make a list of your 10-15 most sold dishes. These determine 80% of your revenue and profit. Start here, then you'll see results quickly.
Calculate cost price per dish
Add up all ingredient costs: main ingredient, side dishes, sauces, garnish, oil, spices. Don't forget anything, even small amounts add up.
Calculate food cost percentage
Divide cost price by selling price excl. VAT and multiply by 100. Selling price excl. VAT = menu price / 1.09.
Create a clear table
Put all data in a spreadsheet with columns for cost price, selling price, food cost% and margin. Sort by food cost% from high to low.
Identify problem dishes
Dishes above 35% food cost are costing you money. Calculate how much loss this generates per week and per year at your current sales volumes.
✨ Pro tip
Audit your 8 highest-volume dishes every 2 weeks - if any suddenly spike above 35% food cost, you've likely missed a supplier price increase that could cost you €200-500 monthly.
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
What food cost percentage is normal for restaurants?
Most restaurants aim for 28-35% food cost. Fine dining can push up to 38%, while fast-casual typically runs 22-28%. Your target depends on your concept and local market conditions.
Should I include VAT in my cost price calculation?
Never include VAT in food cost calculations. Always use selling prices excluding VAT since menu prices include 9% VAT. Divide your menu price by 1.09 to get the correct base for calculations.
What do I do with dishes that have too high a food cost?
You've got three moves: raise the menu price, shrink the portion size, or swap expensive ingredients for cheaper alternatives. Run the numbers on each option to see which protects your profit margin without hurting sales.
How do I handle seasonal price fluctuations for ingredients?
Track your key ingredients monthly and build a 2-3% buffer into your target food cost. For highly volatile items like seafood, consider market-price menus or seasonal specials that you can adjust quickly.
📚 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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