You're constantly checking competitor X's prices, comparing their menu with yours, and stressing that they're cheaper. But you can't tell me what your own dishes cost or if you're making money on them. External obsession while lacking internal control.
The competitor obsession
Looking at others feels productive. Their prices, their menu, their marketing tactics. But while you're busy analyzing what they're doing, profit's slipping off your own plates.
💡 Example:
You notice the pizzeria down the street sells margherita for €12.50. You charge €14.00. Your immediate thought: "I'm overpriced."
But what do you actually know?
- Their ingredient costs: mystery
- Their mozzarella quality: unknown
- Their portion size: could be anything
- Your cost price: €4.20
- Their cost price: complete guess
You're making pricing decisions based on assumptions.
What you can't see with competitors
Their menu prices tell you nothing about their business. You can't see:
- Their supplier deals - Maybe they've negotiated better wholesale prices
- Their actual portions - 200g vs. 250g steak creates a €3.00 cost difference
- Their ingredient quality - Cheaper products mean lower food costs
- Their profit margins - They might be losing money on that dish
- Their strategy - Could be a loss leader to drive traffic
⚠️ Note:
A competitor who's €2.00 cheaper might still earn more profit if their food costs are €3.00 lower. Without that data, you're comparing completely different business models.
What you can actually control: your margins
You can't influence their prices, but you've got complete control over your numbers. That's where real opportunity lives.
💡 Example: Same restaurant, internal focus
Instead of competitor-watching, you analyze your carbonara:
- Selling price: €14.00 (€12.84 excl. VAT)
- Ingredient costs: €4.20
- Food cost: 32.7%
Result: Healthy margin. Competitors might be cheaper, but you're profitable.
Where to spend your energy instead
Stop competitor surveillance. Focus your time on:
- Calculate exact cost per dish - Know what every plate costs you
- Track food cost percentages - Stay under 35%
- Monitor waste levels - How much gets thrown out daily?
- Standardize portions - Different cooks = different costs
- Update supplier pricing - Costs rise, but do your prices?
💡 Example: Impact of margin focus
Restaurant with 100 covers/day, 6 days/week:
- Reduce food cost from 35% to 30% = 5 percentage points
- Annual revenue: €400,000
- Additional profit: €400,000 × 0.05 = €20,000/year
That beats analyzing 10 competitors.
The competitor paradox
Here's what's interesting: master your margins, and you automatically become more competitive. You can:
- Choose lower prices strategically (you know your costs)
- Invest in premium ingredients (margin allows it)
- Respond quickly to price pressure (you know your limits)
- Develop profitable new dishes (you can forecast margins)
Control your numbers, and you're no longer reactive to others' moves. You make informed choices based on data, not panic. This is a pattern we see repeatedly in restaurant financials - owners who focus internally outperform those constantly looking sideways.
How to flip this script
Start with your 5 top-selling dishes. Calculate for each:
- Precise ingredient costs (everything touching the plate)
- Selling price excluding VAT
- Food cost percentage
Once you've got these numbers, you can finally judge if competitor prices matter to your business. Tools like KitchenNmbrs make this calculation straightforward - no more guessing games.
How do you get control of your own margins? (step by step)
Choose your top 5 dishes
Pick your 5 best-selling dishes. These are your most important profit makers. If these are solid, you've solved 80% of your problem.
Calculate the exact cost price
Add up all ingredients: main product, garnish, sauce, oil, butter, everything that goes on the plate. Use current purchase prices from your supplier.
Check your food cost percentage
Divide ingredient costs by selling price excl. VAT and multiply by 100. Above 35%? Then you're not making enough on that dish.
✨ Pro tip
Track your 8 highest-margin dishes over the next 30 days - not your best-sellers, but your most profitable plates. You'll discover which items actually fund your business while competitors chase volume.
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
Should I ignore competitors completely?
Look for inspiration and market positioning, but don't base pricing decisions on their moves. Get your own numbers straight first, then compare meaningfully.
What if my competitor is consistently cheaper?
Check if you're still profitable at your current prices. If your food cost stays under 35%, you can choose to compete on price or focus on quality and service instead.
How do I know if my prices fit the market?
Watch your occupancy rate and customer satisfaction scores. Full restaurant with happy guests means your pricing works, regardless of competitor rates.
Can I increase prices when my margins are thin?
Absolutely, but do it strategically. Test price increases on your least popular dishes first, or improve presentation and quality before adjusting prices.
What if customers complain I'm pricier than competitor X?
Explain the value difference: bigger portions, better ingredients, superior service. If you can't justify the premium, then examine whether your prices make sense.
How often should I recalculate my dish costs?
Monthly at minimum, weekly if you're experiencing ingredient price volatility. Costs change faster than most restaurant owners realize, especially for proteins and seasonal items.
📚 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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