Here's something most restaurant owners won't admit: they're secretly terrified their menu prices are bleeding money. You set those prices months ago, but suppliers kept raising costs while you didn't. Now every plate feels like a small financial defeat.
Spot the warning signs of underpriced dishes
That nagging feeling doesn't appear overnight. Your gut's picking up on real signals:
- Packed dining room but your bank account tells a different story
- Suppliers bumped their rates while your menu stayed frozen
- Your kitchen staff mentions ingredient costs more often
- Competitors charge 20% more for similar plates
⚠️ Watch out:
Sometimes that "too cheap" feeling comes from guessing instead of calculating. Run your actual numbers before making changes.
Calculate real food costs for your top sellers
Pick your 5 most popular dishes and crunch the numbers. This is the kind of thing you only learn after closing your first month at a loss - assumptions kill profits.
💡 Example:
Pasta carbonara - menu price €18.50 (incl. 9% VAT):
- Price without tax: €16.97
- Ingredient costs: €6.80
- Food cost: (€6.80 / €16.97) × 100 = 40.1%
Way too high - aim for 28-35%
The math's simple: Food cost % = (Ingredient costs / Price excl. VAT) × 100
Set your new price floor
Food costs above 35%? Time to figure out what you actually need to charge for a healthy 30%:
💡 Example calculation:
Same pasta with €6.80 ingredient costs:
- Target food cost: 30%
- Minimum price excl. VAT: €6.80 / 0.30 = €22.67
- Minimum price incl. VAT: €22.67 × 1.09 = €24.71
From €18.50 to €24.70 = €6.20 jump needed
Use this formula: Minimum price excl. VAT = Ingredient costs / (Target food cost % / 100)
Pick your price adjustment approach
A €6.20 shock increase will empty tables fast. You've got options:
- Staged increases: Jump to €21.50 first, then €24.50 after 3 months
- Recipe tweaks: Source cheaper ingredients but keep the €18.50 price
- Portion control: Less food per plate
- Mixed strategy: Modest price bump + slightly smaller portions
💡 Example phased approach:
Pasta carbonara timeline:
- Today: €18.50 (40.1% food cost)
- Month 1: €21.50 (31.6% food cost)
- Month 4: €24.50 (27.8% food cost)
Customers adapt slowly instead of fleeing
Track the revenue impact
Start with 2-3 dishes and watch what happens. Most owners panic about customer flight, but the reality's often milder:
- A 10% price hike lets you lose 8% of sales volume and still profit more
- Quality-focused guests accept reasonable increases
- You'll shed bargain hunters but keep profitable customers
⚠️ Watch out:
Track revenue per dish after changes. If sales drop more than 15%, dial back the increase or adjust recipes instead.
Handle customer communication honestly
Transparency works better than secrecy. Most diners grasp that ingredient costs have climbed:
- "Rising ingredient costs have led us to adjust our menu"
- "We're committed to maintaining fresh, local ingredients of the same quality"
- "Our prices were last updated on [date]"
Skip the profit margin explanations - stick to quality and cost realities.
How do you tackle menu prices that are too low? (step by step)
Calculate your current food cost
Take your 5 best-selling dishes. Add up all ingredient costs per portion. Divide this by your selling price excl. VAT and multiply by 100. Anything above 35% is too high.
Determine your new minimum prices
Use the formula: ingredient costs divided by desired food cost (for example 0.30 for 30%). Multiply the result by 1.09 for the price including VAT.
Choose your price increase strategy
Big jumps scare people away. Increase gradually (for example first 15%, later another 10%), adjust recipes, or combine both. Test first with 2-3 dishes.
✨ Pro tip
Run ingredient cost checks every 8 weeks and adjust prices by €0.50-1.00 when food costs creep above 33%. Small, frequent tweaks beat massive quarterly shocks.
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 customers?
Most restaurants can handle 10-15% increases, especially with gradual implementation. Quality establishments often push higher. Track sales after each adjustment and adjust accordingly.
What if my food cost is 45% - do I have to increase drastically right away?
No, stage it out. Target 35% food cost first, monitor customer response, then continue adjusting. Meanwhile, explore cheaper ingredient alternatives or portion adjustments.
How do I explain price increases to my regular guests?
Stay honest: ingredient costs have risen and you're maintaining quality standards. Most regulars understand this reality. Focus on quality preservation, not your profit needs.
Do I have to make all dishes more expensive at the same time?
Start with your highest-volume dishes or worst food cost offenders. Test customer reaction before rolling changes across your entire menu.
📚 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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