How to price a menu item
The simplest reliable way to price a dish is to start from its cost and the food cost percentage you want, then sense-check against the market. Pricing on gut feel works until supplier prices move; pricing from cost keeps the margin where you planned it.
Worked example: Mushroom Risotto
A portion of risotto costs $4.47 in ingredients. You want a 28% food cost.
Rounding up to $16.95 lands slightly under target and leaves $12.48 gross margin per plate. Had you rounded down to $15.95, food cost would be 28.0% and every plate would earn $1 less.
Choosing a target
Many full-service restaurants aim for an overall food cost around 28–32%, and set different targets by category so the mix averages out. A steak may run at 35% and still be worth selling because of the cash it earns per plate; a pasta may run at 20%. Bakeries and cloud kitchens often target 25–30%, with packaging counted as part of the cost on delivery orders.
Psychological pricing, briefly
Endings such as .95 or .50 are common on menus, and many upscale menus drop cents entirely. Pick one style and use it across the menu so prices look consistent. The calculator shows the price at five common targets so you can see what a few points of food cost mean in dollars.
When the price feels too high
If the cost-based price is above what your guests will pay, the margin is not the only lever. Look at the portion, the most expensive ingredient and the garnish with the plate cost calculator, or re-cost with a different supplier using the recipe cost calculator.
Pricing the whole menu, not just one dish
Guests rarely order one dish in isolation, and your overall food cost is the average of what you actually sell. That is why most kitchens price by category and then check the mix. A few practical rules:
- Keep anchor prices consistent. If most mains sit between $22 and $28, a $39 main needs to look and read like the premium option.
- Use low-cost dishes to balance high-cost ones. Pasta, grains, vegetables and desserts often run well under target and offset proteins and seafood.
- Watch your best sellers first. A one-point change on the dish you sell 300 times a week matters more than a five-point change on a dish you sell ten times.
- Review prices on a schedule. Many kitchens review quarterly and after any big supplier price change. Small, regular increases are easier on guests than one large jump.
When a supplier raises a key price, recalculate the dishes that use it, compare the new price at target with the current menu price, and decide dish by dish: raise the price, adjust the portion, or accept a lower margin for a while on purpose.
Prices only stay right while costs stay still. BrigadeKit re-costs every dish when an invoice changes a price and shows the new price at target, so you can raise prices before the margin disappears.
FAQ
How much should I raise prices when costs go up?
Recalculate the price at target with the new cost per portion. If the jump is large, many kitchens split it over two menu changes, or adjust the portion or garnish so the price rise stays modest while the margin recovers.
Should drinks use the same target as food?
No. Drinks usually carry much lower cost percentages than food and help balance the overall menu. Cost them separately with their own targets.
Why round up and not to the nearest price?
Rounding down drops you under your target margin on every plate. The calculator always rounds up to the next menu-friendly price, so the food cost at the printed price is at or below your target.
Should every dish have the same target?
No. Use a target per category: proteins and seafood often run higher, while pasta, sides, desserts and drinks run lower. What matters is the average across what you actually sell.
Is cost-plus pricing enough?
It is the floor, not the answer. Check the price against your competitors and what guests expect to pay; if the market price is lower than your cost-based price, change the recipe or the portion, not just the margin.
Do I include tax in the menu price?
Calculate food cost on the price excluding tax. If your menus show prices including sales tax or VAT, enter the rate and the calculator shows the printed price too.