Why restaurant menu pricing is difficult
Menu pricing involves more than adding a markup to ingredient cost. Rent, labor, utilities, packaging, taxes and delivery commissions also affect profitability.
Key steps
- Calculate recipe cost accurately
- Include fixed operating costs
- Evaluate each sales channel separately
- Use competitors as a reference, not a template
- Analyze sales volume together with contribution margin
Sustainable pricing balances cost, target profitability, market position and customer perception.