February 5, 2019
How to Competitively Price Your Menu
Pricing a menu is tricky business: price dishes too high, and you’ll turn off patrons. Price it too low and you’ll cut deep into your profit margins. It’s a skill to find that delicate balance, but here are some tips to help you with your restaurant competitive menu pricing strategy.
Start By Understanding Your Food Costs
Your foundation begins by determining food costs. Each ingredient you purchase for your menu has a per-dish cost, which may vary depending on supply and demand or season. Pull your recipe apart, ingredient by ingredient. And don’t overlook anything, including a tablespoon of olive oil or a sprinkling of salt. These may seem insignificant costs, but they add up across all dishes.
If you use restaurant inventory management software, you should be able to easily see the per-dish cost, since it’s input into your system.
Take Into Account Seasonality
Watermelon doesn’t come cheap in the winter…if it can be found at all. As you’re building your menu, realize that some ingredients are seasonal. You have a decision here: offer the dish only when the produce is in season or replace that ingredient with another (risotto is a great platform for whatever is in season).
You can also factor the seasonal fluctuations in price for that ingredient into the price you set for the menu year ‘round. Rather than raising the price of that tomato salad in the winter by $1, you can offset the expected price increase for the dish throughout the year.
Check Out Local Competitors’ Pricing
There’s nothing wrong with doing a little research: find out what nearby restaurants are charging for similar dishes. If you can match or beat the price, you’ll be assured of plenty of business. Charge too much above the competition, and you’ll risk losing customers based on price.
Understand Each Dish’s Potential Profit
One key component of your restaurant competitive menu pricing strategy is to understand margin. Not every dish will have the same profit margin. High-end cuts of meat like steak can be marked up 50% above cost, but salads, appetizers, and desserts can be marked up as much as 80% or more. The strategy here is to sell the items with more margin. Even though your salads & desserts may have a better food cost percentage than your steaks, you will make more more from the steaks, albeit at a higher food cost percentage.
Factor in Other Costs
Beyond food costs, you also have to cover your staff’s payroll, overhead, marketing, utilities, et cetera. Factor in a little extra to help cover these costs when pricing dishes for your menu on top of your profit margin to ensure that not only can you pay your expenses, but you also have enough to cover your other expenses.
Get a Pricing Strategy
Now that you’ve got a general idea of what to set prices at for dishes on your menu, it’s time to employ a little psychology. Don’t end your prices with .99. Patrons prefer whole dollars. If you run a higher-end restaurant business, don’t use the $ sign. It’s understood.
Feature dishes that you struggle to sell by highlighting them on the menu or having your wait staff list them as the daily special. This is a great way to get rid of ingredients that will go to waste in a few days if they aren’t used.
Be Cautious When Raising Prices
Once you’ve set menu prices, pause before raising them again soon. People become used to your prices and may balk at paying even $1 more. If you do plan to raise prices, let customers know, especially if something like an egg shortage in your area has impacted what you pay for ingredients. You can always lower prices if you aren’t seeing sales as high of a particular dish as you’d like, or put it on special for a week to test out a lower price first.
Be aware of pricing “ceilings”. Most guests won’t notice a price increase from $26 to $27, but increasing it from $29 to $30 will be more noticeable psychologically. Price ceilings are typically crossing the increments of 10 (10, 20, 30 etc).
Pay Attention to Your Menu Sales Mix
Your menu’s sales mix is something that will change over time, but tracking sales of each menu item can help you better strategize your profitability.
Naturally, you want to maximize the Stars on your menu — those items that are in high demand and that have high profitability. Dogs, however, have low profitability and demand, so you should consider removing them from the menu.
Include a mix of Plowhorses, which have low profitability but high demand (they may drive business into your restaurant, but you’ll attract diners to other menu items while they’re there).
When it comes to Puzzles, those menu items with high profitability but low demand, do some experimenting to see if you can increase sales of them. Lowering the price or featuring these menu items as daily specials can boost sales.
Pricing your menu items isn’t a simple process. But having a solid restaurant competitive menu pricing strategy is key to being successful. Take your time to ensure you find the perfect price that will help you sell many dishes and still make a profit. restaurant competitive menu pricing strategy
Suggested Reading
Related Pages Index
- After Hours
- Chef Coat Giveaway!
- Chefs Resources Login
- Freshwater Fish for Restaurants
- Log In
- Members
- Members
- Members
- Members
- Members
- My Account
- Registration
- User
- User
- User
- User
- User
- User
- User
- Checkout
- Schedule a Class or Consultation
- Line Cook Jobs Marysville Washington
- Chefs Resources Site Index
- Media Kit
- Home
- Kitchen Forms Index
- Break Schedule for Cooks Restaurant Employees
- Kitchen Opening & Closing Duties
- Kitchen Pre Shift Meeting Form
- Kitchen Training Checklist for Cooks
- Produce Ordering Guide for Restaurants
- Restaurant COVID 19 Sanitation Checklist
- Restaurant Kitchen Order Guide Template Excel
- Restaurant Labor Cost Excel Template
- Restaurant Maintenance Checklist – Kitchen Maintenance Log
- How to Create Forms with Excel
- Kitchen Temperature Log Sheets
- Restaurant Kitchen Schedule Template Excel
- Commercial Kitchen Cleaning Schedule
- Beef Butchering Yield Form
- Cook Evaluation Form
- Fish Filleting Log and Butchering Chart
- Food Cost Calculation Form
- Kitchen Station Task List
- Recipe Evaluation Form
- Prep Sheets
- Recipe Templates
- Using Excel for Event Planning
- Kitchen Management Tools
- How to Create a Restaurant Financial Forecast
- Restaurant Cash Flow Management
- The Kitchen Code: Ethos of the Professional Kitchen
- Whiteboard Chef Management Series
- Managing Restaurant Productivity
- The Art of Food Cost Control | Bid Sheet | Controlling Purchasing
- Restaurant Inventory Control
- Food Safety
- Kitchen Management Alley
- How to Become a Sous Chef
- Improve Cook and Server Communication
- Role of a Sous Chef or Kitchen Supervisor
- How to Reopen a Restaurant after COVID 19 Shut Down
- Chef Leadership Skills Training
- Restaurant Food Allergy Training
- Modern Kitchen Brigade System
- Professional Plate Presentation Tips Infographic
- OpenTable: Create Covers Summary from Reservation List
- National Restaurant Cook Shortage – Finding a Solution
- Language of the Professional Kitchen
- How to Deal with Restaurant P&L Reviews
- Dealing with Murphy’s Law
- Kitchen Expeditor aka The Wheelman
- Proper Seating and Flow of Restaurant Customers
- mise en place – a Way of Life in the Kitchen
- Chef Recipes – the Purpose of a Recipe
- Chef Food Cost Bonus Program
- How To Organize Recipes
- Is It Time to 86 Tipping?
- Should Chefs Write Letters of Recommendation?
- Fond – Tidbits for Chefs
- Meats
- Beef Info and Options
- Specialty Beef
- Cuts of Beef Index
- Meat Buyers Guide PDF
- Bottom Round
- Brisket of Beef
- Chuck Roast
- Chuck Steak Varieties Chart
- Cuts-of-Steak-and-Alternate-Steak-Names
- Delmonico Steak
- Hanger Steak
- Loin Steaks and Steak Types
- Mock Tender-Petite Fillet
- Prime Rib
- Rib Steak Cuts
- Round Steak Varieties
- Short Loin, T Bone Steak, Porterhouse Steak
- Short Ribs
- T-Bone Steak
- Tenderloin of Beef
- Top Sirloin
- Tri Tip
- Beef Instruction
- Beef Butchering Yield %
- Lamb Meat Buyers Specs
- Offal Varieties
- Pork Meat Buyers Specs
- Venison Culinary Notes
- Beef Info and Options
- Seafood
- Fresh Fish Availability Chart
- Guidelines for Purchasing Quality Seafood
- How to Store Fresh Fish
- Fish Fillet Butchering Yields
- Fish Culinary Information
- Fish Index
- Fresh Fish Availability Infographic
- Alaskan Pollock Flavor Culinary Profile
- Amberjack Fish
- Arctic Char
- Atlantic Pollock Flavor Culinary Profile
- Barracuda Fish
- Barramundi
- Basa Fish
- Black Drum Fish
- Black Sea Bass
- Catfish
- Chilean Sea Bass
- Cod
- Corvina Fish
- Dory Fish – John Dory
- Dory Fish – Mirror Dory
- Escolar Fish Culinary Profile
- Gold Spotted Sand Bass
- Grouper Fish
- Haddock
- Hake Fish
- Halibut
- Hapu – Hawaiian Sea Bass
- Hebi – Spearfish Fish
- Hiramasa Kingfish
- Lingcod
- Mahi-mahi
- Marlin – Blue Marlin Kajiki
- Marlin – Striped Marlin Nairagi
- Monchong
- Monkfish Culinary Flavor Profile
- Onaga – Hawaiian Red Snapper
- Opah Fish
- Opakapaka
- Red Drum Fish
- Red Snapper
- Rockfish
- Sablefish-Black Cod
- Salmon Varieties
- Sardines
- Sea Bass Varieties
- Skate Fish
- Sole Varieties & Species
- Striped Bass
- Sturgeon
- Swai Fish
- Swordfish
- Tilapia Fish
- Tuna Varieties
- Uku – Hawaiian Uku, Jobfish
- Wahoo (Ono) Fish
- White Sea Bass
- Salmon Yields
- Sushi Names of Fish
- Oyster Varieties
- Atlantic Oysters Index
- Alba Bras d’Or Lakes Oysters
- Cottage City Oysters
- Watch House Point
- Misty Point Oysters
- Barnstable Oyster
- Beausoleil Oyster
- Bedeque Bay Oysters
- Belon Oysters – Maine
- Blackberry Point Oysters
- Blue Point Oysters
- Cape Breton Oysters
- Cape North Oyster
- Cavendish Cup Oyster
- Chatham Oysters
- Chesapeake Oyster
- Chincoteague Oysters
- Colville Bay Oysters
- Conway Cup Oysters
- Cotuit Oysters
- Cuttyhunk Oysters
- Dune Shadow Oysters
- Duxbury Oysters
- Forbidden Oysters
- French Kiss Oysters
- Glidden Point Oysters
- Hurricane Harbor Oysters
- Island Creek Oysters
- James River Oysters
- Katama Bay Oysters – Sweet Petite Oysters
- Malagash Thrumcap Oysters
- Malpeque Oyster
- Martha’s Vineyard Oysters
- Mecox Bay Oysters
- Moonstone Oysters
- Naked Cowboy Oysters
- Olde Salt Oysters
- Oysterponds Oysters
- Paramour Oysters
- Parrot Island Oysters
- Peconic Bay Oysters
- Pemaquid Oysters
- Pleasant Bay Oysters
- Pipes Cove Oysters
- Quonset Point Oysters
- Ram Island Oysters
- Rappahannock River Oysters
- Raspberry Point Oysters
- Saddlerock Oysters
- Salt Pond Oysters – Salt Pond Selects
- Snow Hills Oysters
- South Hampton Select Oysters
- Stingray Oysters
- Summerside Oyster
- Tatamagouche Oyster
- Tomahawk Oysters
- Umami Oysters
- Wawenauk Oysters
- Watch Hill Oysters
- Wellfleet Oysters
- Westport Island Oysters
- Whale Rock Oysters
- WiAnno Oysters
- Widows Hole Oysters
- York River Oyster
- California Oysters Index
- Pacific Northwest Oysters
- King of the North Oysters
- Pacific Northwest Oysters Index
- Alaska Gold Oysters
- Amai Oysters
- Bald Point Oysters
- Barron Point Oysters
- Baynes Sound Oysters
- Baywater Sweet Oysters
- Blue Pool Oysters
- Brooklyn Creek Oysters
- Brookside Oysters
- Bruces Beach House Oysters
- Buckley Bay Oysters
- Capital Oysters
- Chef’s Creek Oyster
- Chelsea Gem Oysters
- Compass Point Oysters
- Cortes Island Oysters
- Cougar Creek Oysters
- Cranberry Creek Oysters
- Dabob Bay Oyster
- Deep Bay Oysters
- Deer Creek Oysters
- Denman Island Oysters
- Dosewallips Oysters
- Eagle Creek Oysters
- Eagle Rock Oyster
- Effingham Oysters
- Eld Inlet Oyster
- Elkhorn Oysters
- Emerald Cove Oyster
- Evening Cove Oysters
- Fanny Bay Oyster
- Fish Point Oysters
- Gold Creek Oysters
- Golden Mantle Oyster
- Hama Hama Oysters
- Hammersley Oysters
- Hawks Point Oysters
- Higata Oysters
- Hunters Point Oysters
- Imperial Eagle Oyster
- Jorstad Creek Oyster
- Judd Cove Oysters
- Kachemak Bay Oysters
- Kings Gold Oysters
- Komo Gway Oysters
- Kumamoto Oysters
- Kusshi Oysters Flavor and Cultivation
- Malaspina Oysters
- Maple Point Oysters
- Marrowstone Oysters
- Metcalfe Bay Oysters
- Midnight Bay Oysters
- Minter Sweet Select Oysters
- Mirada Oysters
- Miyagi Oyster
- Naked Roy’s Oysters
- Netarts Bay Oyster
- Nisqually Sweet Oysters
- Nootka Sound Oysters
- Okeover Organic Oysters
- Olympia Oyster
- Olympic Miyagi Oyster
- Otter Cove Oysters
- Oysterville Select Oysters
- Pearl Bay Oysters
- Pearl Point Oysters
- Pebble Cove Oyster
- Penn Cove Select Oyster
- Phantom Creek Oysters
- Port Gamble Oysters
- Purple Mountain Oysters
- Quadra Island Oysters
- Quilcene Oyster
- Rainier Oysters
- Reach Island Oysters
- Rock Point Oysters
- Royal Miyagi Oyster
- Salish Oysters
- Samish Bay Oysters
- Satori Oysters Flavor
- Shoal Bay Oysters
- Shigoku Oysters
- Ships Point Oysters
- Sinku Oysters
- Sister Point Oysters
- Skookum Oysters
- Snow Creek Oyster
- Snow Creek Flat Oyster
- South Bay Pacific Oyster
- Stellar Bay Oysters
- Summer Ice Oysters
- Sun Hollow Oysters
- Sunset Beach Oyster
- Sunshine Coast Oysters
- Swinomish Oysters
- Takara Oysters
- Thorndyke Oyster
- Totten Oysters
- Totten Virginica Oysters
- Umpqua Triangle Oysters
- Westcott Bay Flat Oyster
- Westcott Bay Petite Oysters
- Wildcat Cove Oysters
- Willapa Bay Oysters
- Windy Point Oysters
- Yaquina Bay Oysters
- Zen Oysters
- The 5 Oyster Species
- Oyster Maps
- How to Shuck Oysters
- Oyster Farming Methods
- Buy Raw Oysters
- Atlantic Oysters Index
- Shellfish
- Sustainable Seafood Programs
- Culinary Conversions
- Produce
- Videos
- Interviews
- How To Fillet Fish Videos
- Kitchen Management Videos
- How To Cut Beef Videos
- Culinary Tool Reviews
- Knife Review Rating System
- Kotai Kiritsuke 8′ Knife Review
- Shan Zu Chef Knife Review
- The Chef Club Knife Review
- Asai PM Damascus Gyuto 240mm Knife Review
- Bob Kramer Essential 10″ Chef Knife Review
- Dalstrong Shogun Chef Knife Review
- Imarku 8 inch Chefs Knife Review
- KADAA Ceramic Chef Knife Review
- LauKingdom Chefs Knife Review
- Miyabi Kaizen 9 1/2″ Chef’s Knife
- Shun Ken Onion Chef Knife Review
- Tojiro DP Gyuto Knife Review
- Tokageh Gyutou Chef Knife Classic Series
- Tokageh Santoku 7″ Knife – Classic Series
- Japanese Gyuto Chef Knife C6
- Japanese Gyuto Damacus Chef Knife D2
- Vie Belles 7″ Santoku Reserve Series
- Oysterguru iPhone App Review
- How to Break Down Beef into Steaks
- Blog
- Culinary Articles
- My Culinary Creations
- Purchase The NAMP Meat Buyer’s Guide
- Tulalip Resort Casino Culinary Highlights
- Additional Chef Resources
- About Us
- Advertise with Us
- Author’s Bio
- Chefs Resources Demographics
- Contact Us
- Culinary Blogs
- Culinary Definitions
- Shop our Store
- Copyrights
- Photo Licensing
- Press Release
- Privacy Policy
- Terms Of Use
- Aqua Maps Info
- Food Cost Calculation
- Chefs Resources Subscriber Options
- Chefs Resources Download Index
- Chefs Resources Excel Downloads Preview
- Kitchen Management Course & Staff Video Tutorials Preview
- Chefs Resources MEMEs
- Chefs Resources Excel Downloads
- Chefs Resources PDF Downloads
- Chefs Resources Kitchen Management Downloads
- Chefs Resources Premium Excel Downloads
- Platinum Members Video Tutorial Access
- Troubleshoot Accessing or Downloading Content
- Membership Account
Well said. A lot of folks over-simplify pricing (and I’m sure some over-think it) but Chefs tend to fixate on food cost. Menu mix and margin are SO important and too often overlooked for net profitability.