What to charge, given what the dish costs you and the food cost percentage you want to run — plus what a few points is actually worth in dollars.
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| Target food cost | Menu price | Gross profit |
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The arithmetic is one line: price = plate cost ÷ target food cost %. A $5.40 plate at a 30% target prices at $18.00. The ladder above shows the same dish at several targets so you can see what a few points actually cost you in dollars — on 60 covers a week, moving from 32% to 28% is real money, and it is usually invisible on a P&L until year end.
Cost-plus pricing gets you a floor, not an answer. Two adjustments matter. First, round with intent: $18.00 reads as more expensive than $17.75 for four cents of margin, and menu prices ending in whole dollars or .5 test better than .99 in table service. Second, let the menu subsidise itself: high-margin items (pasta, chicken, anything fried) can carry a lower percentage on steak and scallops, because guests price-check the expensive dishes and rarely notice the cheap ones. Manage the blended food cost across the menu, not every line individually.
What you should never do is price a dish below its cost-plus floor because a competitor does. Their volume, their supplier terms and their labour model are not yours, and matching a price you cannot make money at is how independents close.
Price = plate cost ÷ target food cost percentage. A $5.40 plate at a 30% target prices at $18.00. Treat that as a floor, then adjust for how the dish sits on the menu.
No. Manage the blended food cost across the menu. High-margin items can carry a lower percentage on expensive proteins, because guests price-check steak and scallops and rarely notice what pasta costs.
Rarely in table service. Whole dollars or .50 endings test better and read as more confident; .99 signals discounting, which usually works against a full-service positioning.