Menu & pricing
How to raise menu prices without losing guests
By RestoGrowth Advisor Editorial Team · Published
Work out the new price from your new plate cost, raise the dishes that can carry it first, and change a few prices at a time rather than the whole menu at once. To stand still, a price has to rise by at least the increase in plate cost; to keep the same food cost percentage, it has to rise a little more.
When it is time to raise prices
Look at each dish, not the menu as a whole. A dish needs a new price when:
- its plate cost has gone up since you last priced it (check your latest invoices);
- its food cost percentage has drifted well above your target;
- it sells well but earns less per plate than most of your dishes.
Re-cost your best sellers at least every quarter. Small supplier increases add up without anyone noticing. The food cost percentage guide shows how to cost a plate.
Two ways to set the new price
Keep the same dollars per plate. The smallest increase that leaves you no worse off:
Keep the same food cost percentage. A slightly bigger increase that keeps your cost ratios in line:
Then round to a price that reads well on your menu.
Worked example
An example restaurant sells a chicken entrée for $18. Its plate cost has gone from $5.40 to $6.10.
| Price | $18.00 |
|---|---|
| Plate cost before → now | $5.40 → $6.10 |
| Food cost before → now | 30.0% → 33.9% |
| Dollars per plate before → now | $12.60 → $11.90 |
| Keep $12.60 per plate: $6.10 + $12.60 | $18.70 → round to $19 |
|---|---|
| Keep 30% food cost: $6.10 ÷ 30% | $20.33 → round to $20.50 |
At $19 the dish earns $12.90 a plate, a little more than before, with a 32.1% food cost. Moving straight to $20.50 restores the 30% food cost but is a bigger jump for guests to notice. A sensible path is $19 now and another look in a few months.
See which dishes earn the most per plateFree Menu Engineering & Pricing. No sign-up needed.How to raise prices without losing guests
- Start with your most popular, high-earning dishes. Guests who order them come for them. In menu engineering terms these are your Stars (see menu engineering in plain English).
- Raise a few prices at a time. Small steps on a few dishes are noticed less than a new price on every line.
- Change the dish, not just the number. A better description, a new side or a new presentation gives guests a reason for the new price.
- Drop the dollar signs. In a Cornell study at the Culinary Institute of America’s restaurant, guests given a menu with plain numbers (no “$”) spent significantly more than guests whose menu showed “$” or prices written in words.
- Offer a lower-priced choice. A smaller portion or a lunch version keeps price-conscious regulars.
- Update every menu at once. Printed, online, QR and delivery-app menus should match on the same day.
Check the result after four weeks
Compare four weeks before and after: how many of each repriced dish sold, the dollars it earned, and your overall average check. If a dish sells a lot less, try a smaller step or a better description before cutting the price back.
Remember the costs that rise with price, too. Card fees and delivery-app commissions are a percentage of the sale; the delivery app calculator shows what a delivery order really keeps.
Common mistakes
Frequently asked questions
How do I calculate a new menu price when food costs go up?
To keep the same dollars per plate, add your old dollar margin to the new plate cost. To keep the same food cost percentage, divide the new plate cost by your target food cost percentage. Then round to a price that reads well.
How often should a restaurant raise prices?
Re-cost your best sellers at least every quarter and adjust when costs have moved. Small, regular steps on a few dishes are usually easier on guests than one big change to the whole menu.
Should menu prices show a dollar sign?
A Cornell study found guests spent significantly more when menu prices were plain numbers than when they showed a dollar sign or were written in words. Many restaurants now leave the “$” off.
Sources
- Yang, Kimes & Sessarego, “$ or Dollars: Effects of Menu-price Formats on Restaurant Checks”, Cornell Center for Hospitality Research (2009)Used for: Guests spent more when menu prices had no “$” sign
Examples use an invented example restaurant with round numbers. See how we calculate for the formulas behind our tools, and our editorial policy for how guides are checked. Spotted a mistake? Tell us and we will fix it.