Menu Pricing
How to Price a Restaurant Menu Without Guessing
Turn ingredient costs, VAT and target margins into commercially sensible menu prices.
Menu pricing that starts with "what's the competition charging?" is a coin toss. The reliable version starts with cost, adds your target GP, adds VAT, then sense-checks against the market.
The four-step framework
1.Recipe-cost the dish, including trim, sauce and garnish. 2. Divide by (1 − target GP) to get the ex-VAT price. 3. Multiply by 1.20 for the on-menu price (standard UK VAT). 4. Round to a psychologically sensible price point.
Example
A pasta dish costs £2.60 to make. Target GP is 72%. Ex-VAT price is 2.60 ÷ 0.28 = £9.29. Add VAT → £11.14. Round to £11.50.
Sense-check against the room
Once you've got a costed price, ask three questions. Does it fit the guest's mental price band for the dish? Does it sit correctly on the menu (starters cheaper than mains, etc)? Does it leave room for a specials board?