Picture this: your popular pasta dish that used to deliver solid profits is now bleeding money every time you serve it. Three years of supplier price increases while your menu stayed frozen means your margins have quietly evaporated. Here's how to diagnose the damage and fix it systematically.
First, assess the damage
Before you adjust anything, figure out exactly how much you're hemorrhaging. Most restaurant owners are stunned by what they uncover during this audit.
💡 Example:
Your steak was on the menu in 2021 for €28.00. Back then, the ingredients cost €8.00 = 31% food cost.
- Beef: +25% increase
- Vegetables: +15% increase
- Butter: +30% increase
Now those same ingredients cost €10.20 = 39% food cost
You're hemorrhaging €2.20 per steak. At 30 steaks weekly, that's €3,432 vanishing annually from just one dish.
Analyze your top 5
Focus on your 5 highest-volume dishes. They're driving roughly 70% of your profit—or losses. Calculate for each:
- Current selling price (excl. 9% VAT)
- Today's actual ingredient costs
- Current food cost percentage
- Weekly sales volume
⚠️ Note:
Count everything: protein, sides, sauces, garnish, cooking oil, butter. Those seemingly minor costs accumulate quickly.
Calculate what you're losing
For dishes where food cost exceeds 35%:
Annual loss = Extra cost per portion × Weekly portions × 52
💡 Example calculation:
Pasta carbonara - was 28% food cost, now 37%
- Selling price: €16.51 excl. VAT
- Extra cost: 9% × €16.51 = €1.49 per portion
- Sales: 40 portions per week
Annual loss: €1.49 × 40 × 52 = €3,101
Choose your strategy
From analyzing actual purchasing data across different restaurant types, three approaches work. Each carries distinct trade-offs:
Option 1: Raise prices
- Advantage: Direct margin recovery
- Disadvantage: Risk of customer pushback
- Tip: Cap increases at 15% per adjustment
Option 2: Adjust recipes
- Advantage: Pricing remains stable
- Disadvantage: Potential flavor changes
- Tip: Substitute expensive ingredients strategically
Option 3: Split the difference
- Advantage: Less jarring changes
- Disadvantage: Requires more coordination
- Tip: Bump price 8%, trim costs 8%
Plan the execution
Don't overhaul everything simultaneously. Customers will definitely notice and react negatively.
💡 Smart approach:
- Week 1-2: Fix the 2 worst performers
- Week 3-4: Address next 3 dishes
- Week 5-6: Handle remaining items
This staggers the impact and maintains customer satisfaction.
Frame price adjustments positively. Skip "due to inflation" and emphasize "maintaining our quality standards."
Prevent it from happening again
Establish quarterly reviews to catch this early. Monitor these indicators:
- Supplier price fluctuations
- Food cost percentage drift
- Underperforming dish profitability
Tools like KitchenNmbrs alert you immediately when food costs spike, eliminating manual calculations and preventing future margin erosion.
How do you restore your margins? (step by step)
Calculate current food cost of your top sellers
Pick your 5 best-selling dishes. Add up all ingredient costs and divide by selling price excl. VAT. Anything above 35% needs to be addressed.
Calculate annual loss per dish
Multiply the loss per portion by number of portions per week and by 52. This shows you the real impact of not updating.
Choose approach per dish
Decide per dish: raise price, adjust recipe, or combination. Roll out changes gradually over 6 weeks.
✨ Pro tip
Target your highest-volume dish first—even a 2% margin improvement on something you sell 200 times weekly generates €2,080 extra profit annually with minimal customer disruption.
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 raise my prices without losing guests?
Maximum 10-15% at once. Beyond that, increases become too noticeable and drive customers away. Small adjustments every 6 months work better than dramatic jumps.
Which ingredients can I replace to save costs?
Swap premium brands for quality alternatives, use seasonal vegetables, and choose cheaper cuts that benefit from longer cooking methods. Always taste-test substitutions before implementing them.
How often should I check my menu for profitability?
Every 3 months minimum. Suppliers adjust prices regularly, and you need to catch cost creep early. Review immediately after any major supplier price updates.
Is it better to remove dishes from the menu than raise prices?
Only eliminate dishes that sell poorly AND lose money consistently. Never remove popular items—adjust their pricing or recipes instead to restore profitability.
📚 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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