85% of restaurant owners admit to copying competitor prices without calculating their own costs first. Your colleague prices pasta at €16.50, so you go with €16.00. But their supplier prices, portion sizes, and overhead costs are completely different from yours.
Why colleagues' prices don't work for your kitchen
Every restaurant operates differently. What generates profit for your neighbor might drain your margins. Here's why:
- Different suppliers: You pay €24/kg for salmon, they have a contract for €19/kg
- Different portions: They serve 180 grams, you serve 220 grams
- Different costs: Their rent is lower, their staff cheaper
- Different concept: They do 200 covers per day, you do 80
💡 Example:
Your colleague sells steak for €28.00. Their cost price:
- Meat (200g): €6.40
- Side dishes: €1.80
- Total: €8.20
Their food cost: 30.2% (€8.20 / €25.69 excl. VAT)
Your cost price for the same dish:
- Meat (220g): €7.70
- Side dishes: €2.10
- Total: €9.80
Your food cost at €28.00: 38.2% - way too high!
Where copying prices goes wrong
The biggest mistakes happen when you copy prices without doing the math:
Different purchase prices
Your neighbor might negotiate better deals, buy in larger quantities, or work with different distributors. Their €18/kg salmon could cost you €22/kg.
Different portion sizes
"A steak" tells you nothing. 180 grams or 250 grams? Bone-in or boneless? That's a €3-4 difference per plate.
⚠️ Watch out:
A 2 percentage point difference in food cost equals €6,000 annually on €300,000 revenue. That's real money walking out your door.
Different cost structure
Their restaurant serves 300 covers daily, yours handles 100. They spread fixed costs across more plates. Lower margins still work for them.
The real cost of wrong prices
Based on real restaurant P&L data, copying prices without knowing your numbers creates predictable losses:
💡 Calculation example:
You copy competitor pricing: pasta at €16.50
- Their cost price: €4.50 (29.7% food cost)
- Your cost price: €5.80 (38.3% food cost)
- Loss per portion: €1.30
Selling 40 pastas weekly costs you: €1.30 × 40 × 52 = €2,704 annually
On just one dish.
How to set profitable prices
Only one method guarantees profitable pricing: calculate your actual costs first.
- Calculate your real cost price per dish
- Set your target food cost (typically 28-35%)
- Calculate minimum selling price
- Verify market acceptance for that price point
Use this formula: Minimum selling price = Cost price ÷ (Food cost % ÷ 100)
💡 Practical example:
Your pasta costs €5.80 in ingredients. You target 30% food cost.
- Minimum price excl. VAT: €5.80 ÷ 0.30 = €19.33
- Minimum price incl. VAT: €19.33 × 1.09 = €21.07
You must charge at least €21.00, not €16.50.
Market prices vs. cost prices
Sometimes your minimum price exceeds what customers will pay. You've got three choices:
- Reduce costs: find cheaper suppliers, adjust portions, substitute ingredients
- Drop the dish: unprofitable items don't belong on your menu
- Reposition as premium: higher quality justifies higher prices
What you never do: sell at a loss hoping volume will save you. A food cost calculator like KitchenNmbrs can help you run these numbers quickly.
How do you calculate your own minimum selling price?
Calculate your actual cost price
Add up all ingredients: main product, garnish, sauces, oil, butter, spices. Don't forget anything that goes on the plate. Calculate with the prices you actually pay.
Determine your desired food cost percentage
For restaurants this is usually between 28-35%. Fine dining can be lower (25-30%), casual dining slightly higher (30-35%). Choose what fits your concept.
Calculate your minimum selling price
Use the formula: cost price divided by food cost percentage. So €6.00 cost price at 30% food cost = €6.00 / 0.30 = €20.00 excl. VAT. That's €21.80 incl. VAT.
✨ Pro tip
Track your 3 highest-volume dishes weekly - not monthly. These items drive 60% of your food costs, and ingredient price changes hit them first.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Was this article helpful?
Frequently asked questions
Can I still check competitors' prices for reference?
Absolutely, but treat them as market research, not pricing strategy. Always verify if those prices work with your cost structure first.
What if my minimum price is way higher than competitors'?
You have three options: cut costs, remove the dish, or position as premium quality. Selling at a loss isn't sustainable long-term.
How do I know if my suppliers charge more than others?
Request quotes from 3-4 suppliers for your top 10 ingredients. Smaller restaurants often pay premium prices due to lower volumes, but you need to factor that into pricing.
Should I adjust all my prices if they're too low?
Start with your top sellers - they impact profits most. Raise prices gradually over 2-3 months to avoid shocking customers.
How often should I recalculate cost prices?
Monthly for your top 10 dishes, quarterly for everything else. Ingredient prices fluctuate more than most owners realize.
What food cost percentage should I target for different dish types?
Proteins typically run 28-32%, pasta dishes 25-30%, appetizers can go 35-40%. Higher-priced items usually allow lower food cost percentages.
📚 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.
Stop losing money in your kitchen
Most restaurants lose 5-15% margin due to invisible mistakes. KitchenNmbrs makes every euro visible — from purchase to plate. Start your free trial and discover where your money is leaking.
Start free trial →