How to Price a Menu: The Food Cost % Method

October 6, 2026

Menu Profit Planner spreadsheet with suggested prices per dish

Many small restaurants price their menu by looking at the place down the road and adding or taking off a euro. That tells you what guests might accept. It tells you nothing about whether you make money. The food cost % method starts from your own numbers. Then you check the result against the market.

Step 1: Know the plate cost

You can't price a dish until you know what it costs to make one portion, including trim, waste and a small buffer for oil, salt and garnish. If you haven't done that yet, start with how to calculate food cost per plate. For this example, take the braised beef with mashed potato from a sample bistro menu: its plate cost is €3.78.

Step 2: Choose a target food cost %

Your target food cost % is the share of the selling price (before tax) you're willing to spend on ingredients. Many independent restaurants and cafés work somewhere between 28% and 35%. Where you sit depends on your concept:

Lower (25–30%) suits high-volume, simple dishes, coffee and baked goods, or places with high rent and labour costs.
Higher (32–38%) can work for premium ingredients, small teams, or dishes that sell very well.

Pick one number for the whole menu to start. You can make exceptions later.

Step 3: Calculate the price

Price before tax = plate cost ÷ target food cost %

€3.78 ÷ 0.30 = €12.60 before tax. Rounded up to the next 50 cents, that is €13.00.

If your menu prices include VAT, add it back on. With 20% VAT as an example: €12.60 × 1.20 = €15.12, which you'd round up to €15.50. Use your own country's rate.

The bistro charges €14.50 before tax, comfortably above the €12.60 floor. At that price the food cost is 26%.

Step 4: Round sensibly

Round up to a clean step that fits your menu style: whole euros for a casual café, 50 cents for a bistro. Rounding up rather than down protects your margin when ingredient prices creep up later.

Step 5: Check it against reality

The formula gives you a floor. Before you settle on the final price, ask three questions:

Would a guest happily pay it? Compare with similar dishes nearby. If your price is far above the market, look at the recipe and portion before you look at the price.
Is the profit in euros worth it? Percentages can mislead. A steak at 40% food cost may still earn €10 per plate, while a salad at 25% earns €4. Both numbers matter.
Does it fit the rest of the menu? Guests compare dishes with each other. One dish priced far higher than everything around it draws attention for the wrong reasons.

When the formula says the price is too high

If the market won't accept the price your target gives you, don't simply accept a worse margin. Try these first:

Trim the portion of the most expensive ingredient slightly.
Swap one ingredient for a cheaper one that guests won't miss.
Add a lower-cost element that adds value, like a seasonal side or a sauce.
Check whether a supplier has quietly raised prices and whether another would be cheaper.

Only if none of those work should you accept a higher food cost on that dish, and then make sure other dishes balance it out.

How often to review prices

Review every dish's food cost monthly, and reprice when it drifts more than about 5 points above your target. Small, regular adjustments go unnoticed by guests; one big jump once a year does not.

A shortcut

The Menu Profit Planner does every step above automatically: plate cost with yield and buffer, food cost % before tax, and a suggested price at your target, rounded to the step you choose. Each dish is flagged OK, Watch or Reprice so you can see at a glance what needs attention.