Deciding Menu Prices: A Guide for Restaurant Owners
Setting the right menu prices is a critical step for every restaurant owner. Whether you’re running a cozy local café or a bustling fine dining spot, your prices determine not only your profitability but also how customers perceive your business. At CholoEAT, we understand the challenges of managing your restaurant’s financial health, and we’re here to help you create, design, and showcase your menu effectively—both online and offline.
Here’s how you can set accurate and strategic menu prices while taking advantage of CholoEAT’s services, such as professional menu design, printing, online ordering systems, custom apps, and advanced EPOS solutions.
- Be Aware of Inventory Costs
The first step in determining menu prices is understanding your ingredient costs. Track what you spend on ingredients and ensure your inventory aligns with your expected customer base. Avoid over-ordering, but keep a small buffer for unexpected demand.
With CholoEAT, you can integrate inventory tracking with our EPOS system to monitor and manage ingredient usage in real-time, helping you avoid waste and optimise costs.
- Calculate Food Costs per Dish
For every menu item, calculate the exact cost of ingredients used per serving. This may seem tedious, but it’s crucial for setting a baseline price that covers your costs.
Once you’ve determined these costs, CholoEAT’s menu design services can ensure your menu reflects the quality of your offerings while presenting prices in an appealing way.
- Consider Labor Costs
Labor costs vary based on the skill and experience of your staff. Specialised chefs or staff with higher expertise will naturally cost more. Additionally, location plays a role—salaries in busy urban areas like London will differ from rural settings.
CholoEAT’s integrated EPOS systems and staff management features make it easy to calculate labor contributions to your overall costs and profitability.
- Set Your Profit Percentage
Most restaurants aim for a profit margin of 28% to 35%. Decide whether you want a flat rate across your menu or different margins for different meal times, like breakfast, lunch, or dinner.
Use this simple formula to calculate your minimum menu price:
Cost of a dish / (1 - Profit Percentage in decimal form) = Minimum Price
For example: If a meal costs £4.55 to make and you want a 35% profit, the calculation would be:
£4.55 / (1 - 0.35) = £7
- Compare with Competitors
Research what other restaurants in your area are charging for similar dishes. This helps you position yourself competitively while ensuring you don’t undervalue your offerings.
With CholoEAT’s online ordering systems and apps, you can analyse customer trends and preferences to refine your pricing strategy further.
- Keep Prices Flexible
Market conditions and customer preferences change over time. Your prices should be adaptable to fluctuations in ingredient costs, economic shifts, or customer demand. CholoEAT’s digital menu systems allow you to update prices instantly across your website, app, and EPOS system, ensuring consistency and convenience.
- Design a Menu That Sells
Your menu is more than a price list—it’s a key marketing tool. An effective menu combines thoughtful pricing with a visually appealing design that highlights your best-sellers and encourages upselling.
At CholoEAT, we offer professional menu design and printing services that create a lasting impression. Combine this with our online ordering systems and custom apps, and you can showcase your menu to a wider audience, boosting sales and customer engagement.
Final Touches: Questions to Ask Yourself
Before finalising your prices, reflect on the following:
- Are your prices fair to your customers and profitable for your business?
- Can your prices withstand market fluctuations?
- Do your prices align with your target audience?
Pro tip: Avoid using currency symbols on your menu. Studies show that customers are more likely to spend when prices are listed without symbols or decimals (e.g., "7" instead of "£7.00").
Why Choose CholoEAT?
At CholoEAT, we’re not just about designing menus—we’re about helping your restaurant succeed. From menu design and printing to online ordering systems, custom apps, and EPOS solutions, we provide everything you need to streamline your operations and elevate your customer experience.
Let us take the hassle out of managing your restaurant’s menu and ordering process so you can focus on what matters most—delivering great food and exceptional service.
Get in touch with CholoEAT today to learn more!
