Restaurant Menu Pricing Strategies To Boost Your Restaurant Sales

Posted by Priya November 10, 2021 Online Ordering

Restaurant Menu pricing

The menu serves as the primary driving force that brings customers to the restaurant. Customers must satisfy with the payment the quality of food. 

The restaurant’s profitability greatly depends on the menu pricing. Let us know about the pricing strategies that guide restaurants to fix better prices.

What Is Menu Pricing?

Menu pricing is the source of restaurant revenue. It impacts the fund investment in utilities, labor, and the restaurant business progression. Fix menu price based on various factors such as brand value in the market, competitor price value. The demand for the brand and the unique selling proposition (USP)-* may rise or reduce menu prices.-

Restaurant Menu Pricing Strategies to Increase Profits 

Now let us have a fresh look at the various restaurant menu pricing strategies.

  • Menu Price Based On The Restaurant Type

Fix menu pricing based on the raw material price values, labor, and wages. You can also add regular maintenance charges and other hidden expenses. Gross margin value calculation gives the difference between menu price and dish price. Menu price includes food cost, labor charges, and overhead charges.

Calculate Gross Margin Value with a simple formula as:

GMV= (Total Revenue- Cost of sold food)/Revenue

GMV value varies based on fine dining or casual dining, or a quick-service restaurant type.

A quick-service restaurant does not spend much on infrastructure or customer service. So the GMV value ranges around 45%, whereas in fine dining, the GMV value ranges over 75%, and for casual dining, it’s 55%.

  • Cost-Effective Pricing

Analyze the local competitor price value and set the prices for menus. You can assign the menu price value in three driven methods.

  • Change the menu price the same as that of the competitor’s menu price. This type of menu pricing survives your restaurant brand in the competitive market.
  • Set your restaurant menu prices lower than the competitors. This works well for casual restaurants and customers who look for price bargains.
  • Being graded as a high-quality restaurant, you get a chance to attract fine diners. It is necessary to set a high price to maintain the impression.
  • Demand-Driven Pricing Method

Restaurateurs can raise menu prices if the demand for menu items is high. An attractive restaurant background with delightful recipes entices the customers. It offers a better chance to increase the menu prices.

The food demand rises when the customers feel the restaurant offers delicious food.  Food items are priced high in heavily crowded places like amusement parks and airports. However, the customer won’t have a second option to go to any other restaurant.

  • Practice Portion Control Method

The majority of restaurants have enjoyed the big bang profit with practice portion control. Restaurant chefs decide each ingredient amount used in the dish preparation. By then this restricts the quantity allotted for one serving.

For example, in chicken noodles, the chef allocates 8 chicken pieces. So the noodles will not contain more or less than the chicken count before it leaves the kitchen. 

Dry and fresh ingredients, fruits, vegetables used in a dish weighed before usage.  In this way, the portion control of a menu is implemented in all aspects.

Portion control helps control the usage of expensive ingredients. Moreover, it saves labor charges and food wastage.

  •  Increase The Charges For Different Cuisines

Suppose if your restaurant offers Mexican food, then tag the food item with a premium rate. A customer often checks out the premium price of the menu. And he feels that he can expect a fine dining experience in that particular restaurant. A specially prepared food provided at an economical price won’t excite the customers.

  • Sell Your Menu on Social Media

Social media attracts new customers with authentic pictures of your restaurant. Post the food and beverages discounts instantly to the social media page. But few things that affect your social media marketing are:

  • Advertising low-quality restaurant photos.
  • Untrained staff members with poor knowledge of` online restaurant ordering.
  • Promoting the popular items of the restaurant at the wrong customer viewing time.

Thus the marketing over the social media platforms should eliminate a blindfold approach. It depletes the restaurant’s profit.

Blog: Benefits of SaaS-based online food ordering system

  • Fix The Right Price For The Right Quantity

The major mistake committed by the restaurateurs is either to charge the menu items high or too low.  High-priced menu items make the customer stay away from the restaurant.  Menu items with too low value will test the profit margin value.  So it is essential to offer the right portion of food items for the right charge.

  • Offering a large quantity with high charges will not entertain the new customers.  People will not be unaware of the menu item.
  • To withstand the competitive market, offer less quantity food with low charges. But the customer views less quantity as a drawback which results in failure.
  • Finally, the high-priced menu item for less quantity may disappoint the customers. As they might feel the food quantity is too low compared to the charge, they pay for the restaurant.

Thus, offer a decent quantity of the food item at a reasonable price. Now you earn the good hearts of satisfied customers.

  • Make Use of Relative Pricing

Design a menu list with the high-profit items placed next to the expensive dishes. On viewing this, the customers are likely to choose the cheap item. For example, french fries of 60 rupees printed next to the chilly cheese of 150 rupees. Customers will choose french fries by looking at the price.

This menu order placement induces the customer to choose french fries. Thus the customer will place repetitive orders, and it will earn you unlimited profit.

  • Use Complimentary Item Pricing

Increase restaurant sales with complimentary item discounts and offers. For example, a customer may order a medium size pizza worth 220/320 rupees. At the same time, he may not prefer to order french fries worth 90/120 rupees.

But you can offer both the items as a combo offer for 300 rupees. It is a cost-effective deal for the customer to pick the offer.

  • Penetration Pricing

In the initial stages, the restaurant offers food at low prices. After a few days, the restaurant then gradually increases prices. But this gains only limited or zero profit during the start of the business. Even a free sample motivates the customer to place the order. Free samples increase customer loyalty.

When your restaurant needs a perfect branding approach, penetration pricing offers the most. You can earn a handsome profit than the competitors as the charges tend to be lower than anybody else.

Blog: 10 restaurant loyalty program ideas to promote your business in 2021

  • Have A Chef Special In Each Section

Every restaurant will have a chef’s special and secret dish. With no wonder, it remains the dinner’s choice as the exclusive item. The chef’s special dish is a collaborative effort of fancy. A chef might add a few rare ingredients that help to earn a handsome profit.

Restaurant owners highlight this type of dish at the top in each category. Chef’s special dish helps the restaurateurs to promote the other items at a premium price. Restaurants can increase the price of menu items to premium from normal ratings. For example, a restaurant might offer strawberry dessert at 5 dollars previously.  But the price of strawberry dessert changed to 8 dollars.

  • Psychological Pricing

Psychological pricing alters the customer’s perception of the menu price. Even though the item is in high demand of the customer.

Design a menu card with items priced at odd numbers. The customer feels that they spend too low, referred to as charm pricing.

You can print Menu cards with big fonts for the dollar amount and small fonts for cent value.

Anchor pricing places the original price of the menu next to the offer price. It directly saves the amount of the customer.

Psychological pricing addresses the customer’s sensitivity towards the price. It is a great deal for customers who looks for great deals to have restaurant food.

  • Sell Food-based On Cost Not On Contribution Margin

Categorize your food and beverage recipe pricing in a report. Checking the reports will help you understand the profit generated by each menu. Every day of restaurant sales differs based on the orders. As the customers may place the order over varying items.

Analyze the sales pattern to find out the items mostly preferred by the customer. It gains profit helps to train the service team.

For example, paneer tikka may require 32% food charges that contribute 10 dollars. But a shrimp rice food cost ranges higher than 40%, which earns 17 dollars.

A balanced menu pricing helps to comprehend recipe costs. Sell the most profitable items that trigger the customer’s interest to place the order.

Blog: How can online food ordering software help to boost restaurant sales?

Final Words To Speak

There is no single strategy that fits the menu pricing of various restaurants. Pricing depends on various factors: brand image, target customers, serving, and operating costs. Sales reports offer great business insights. Analytics reports point out the areas that need improvement to succeed in the goal. Thus, following restaurant menu pricing strategies helps to boost restaurant sales.

Author Bio


Priya is a passionate writer and enjoys writing articles about software, technology, and marketing. Through her informative blogs, she regularly discovers new tips and tricks that drive sales for restaurants.

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