Menu Pricing Guide for Restaurants

Cost every plate before you price it

A price starts with what the plate costs you to make. Guessing that number is how a best seller ends up losing money.

Build a recipe card for each dish. List every ingredient, the portion in the unit you buy it in, and the unit cost from your latest invoice.

Take a burger as the example. The bun costs $0.45. A 6 ounce patty at $5.20 a pound comes to $1.95. Cheese is $0.30, lettuce, tomato, and onion $0.35, and sauce $0.15.

Then add what people forget. The fries on the side cost $0.60, and the to-go container costs $0.40. The plate comes to $4.20.

Anything you trim or cook down needs a yield. Salmon bought at $12 a pound that keeps 12 usable ounces after trimming actually costs $16 a pound, or $1 an ounce on the plate.

Packaging belongs in the plate cost for any dish you sell for pickup or delivery. So does the garnish, and the sauce cup that goes out with every order.

The table below is the burger's recipe card, line by line.

Turn plate cost into a price with a target food cost

Food cost percentage is plate cost divided by menu price. Flip it around to find a price: divide the plate cost by the food cost you're aiming for.

At a 30% target, the $4.20 burger prices at $14.00. At 28% it prices at $15.00. Read your target off your own P&L, not an industry average.

Treat the result as a floor, not the answer. A dish can carry a lower food cost when guests will pay more for it, and a traffic driver can run a little higher.

Pick one way to end prices, whole dollars or .95, and use it across the menu. A menu that mixes both looks unplanned.

A few dishes set your price reputation

Guests judge the whole menu from the handful of dishes they order most and compare across restaurants. Those anchors carry your price reputation.

Raise an anchor and regulars notice. Raise something in the middle of the menu and usually nobody does. Write down your anchors before you touch a single price.

To find yours, ask which three prices a regular would quote to a friend. For a burger place that might be the house burger, a side of fries, and a soda.

Sort the menu by margin and popularity

Menu engineering sorts each dish on two measures: how many you sell, and how many dollars each one leaves after plate cost. Pull the last 90 days of item sales from your POS.

Dollars matter more than percentages here. The $14 burger leaves $9.80. A $26 salmon plate with $9.10 of plate cost runs a higher 35% food cost, and it still leaves $16.90.

Volume changes the picture again. At 400 burgers a month, the burger brings in $3,920 after plate cost. At 120 plates, the salmon brings in $2,028.

Popular dishes with a strong margin stay put and get the best spot on the menu. Popular dishes with a thin margin get a small raise or a cheaper garnish.

A high-margin dish that doesn't sell needs a better photo, a clearer description, or a higher spot on the page. A dish that sells little and earns little is a candidate to cut.

The table below sets the two dishes side by side.

Change one price, then watch how many sell

You're looking for the price where margin goes up and orders of that dish hold steady. The break-even below tells you how much room you have.

Work out the break-even before you change anything. Moving the burger from $14 to $15 raises what each one leaves from $9.80 to $10.80. To match $3,920 a month, you now need about 363 burgers.

In other words, you could sell 37 fewer burgers a month, about 9%, and still come out even. Lose fewer than that and the raise paid off.

Change one item at a time and give it a few weeks. Compare sales against the same weeks before the change, not against last Saturday.

Keep a price log with the item, old price, new price, plate cost, change date, and units sold in the four weeks before and after. Add a note for anything unusual, like a storm or a street closure.

If sales fall past the break-even, look at the rest of the menu first. When everything dropped, the week was slow. When only that dish dropped, roll the price back halfway.

Split a big increase into two smaller ones a couple of months apart. A single jump is more likely to send a regular looking at other menus.

The table below shows the burger's break-even before and after the raise.

Work out the new price when a supplier raises costs

Say ground beef goes up 15%. The patty moves from $1.95 to about $2.24, and the burger's plate cost moves from $4.20 to $4.49.

At the old $14 price, food cost is now about 32%. Holding 30% takes $14.97, so the menu price becomes $14.95 or $15.

You don't have to pass all of it on. Trim a cost elsewhere on the plate, split the raise across two quarters, or accept a thinner margin on an anchor dish.

Update the recipe card the day the invoice changes. A price review built on last year's costs gives you last year's margin.

The table below follows the beef increase through to the price.

Keep one price on the site, the app, and the counter

When your website, your app, and the menu at the counter disagree, guests notice and your staff hear about it.

Some restaurants price their delivery menus higher to cover delivery costs. That's a fine choice when you make it on purpose, as one rule for every item, rather than letting three systems drift apart.

Write the rule down as a percentage and round the result. A 15% marketplace markup turns the $14 burger into $16.10, which rounds to $16.

Your own site may not need that markup. Appetier takes no commission on direct orders: each location pays a flat monthly fee, never more than $199. Marketplace orders carry no Appetier fee.

Connect Square, Shopify POS, Toast, Clover, Revel, or Micros and a price you change in the POS reaches your site and apps. Sous keeps descriptions and sold-out items current, and it never changes a price unless you allow it.