Menu pricing
How to review your café’s menu prices.
A useful price review starts with your costs, your customers and what people actually buy. It should make the decision clearer, rather than leave you with another percentage to worry about.
Use current, realistic costs.
Start with supplier prices, usable quantities and the portions you actually serve. Include packaging where relevant. If a batch produces fewer saleable portions than the recipe assumes, use the realistic yield.
Keep a note of what is estimated. If waste is not recorded, that is a gap to investigate rather than a reason to assume it is zero. Similarly, a recipe costing from last year may no longer describe the item you sell today.
Use a consistent tax basis for sales and costs, agreed with your accountant where needed. The comparison is only useful when the figures are defined consistently.
Read pounds, percentages and sales together.
Contribution per sale is the selling price minus the direct product cost included in the calculation. Contribution percentage expresses that amount as a share of the selling price. Total contribution also depends on how many you sell.
For example, a fictional item sold for £6 with £2 of direct product cost contributes £4 before other costs. That is a 66.7% contribution margin. The markup on the £2 cost is 200%: a different calculation.
Neither percentage tells the full story. Consider sales volume, preparation demands, shared ingredients and what people buy alongside the item. Labour and other business costs still need to be covered.
Model what might change.
Suppose that same item sells 200 times at £6. With a £2 product cost, it contributes £800 before labour and overheads. At £6.50, with the same cost and 180 sales, it contributes £810.
This is an arithmetic comparison, not a prediction of how customers will respond. It shows why the volume assumption matters. Customers might buy less often, choose another item or change the rest of their order.
Try several plausible volumes instead of assuming sales will stay the same. The menu contribution calculator compares these scenarios and shows the units needed to match the current total contribution.
Consider the whole menu.
An entry-price coffee, a substantial lunch and a seasonal special can serve different purposes. A familiar item may bring regular customers in; another may add value to the overall order. Understand that role before changing prices across the board.
Look for unnecessary complexity too. An item with limited sales may still require separate purchasing, storage and preparation. Whether to keep it depends on more than its ingredient margin.
Competitor prices can provide context, but location, portions, service and costs differ. Another venue’s price does not tell you whether that price would work for your business.
Agree how you will judge the change.
Record the items changed and the date. Compare equivalent trading periods using units sold, transactions, average spend and contribution. Keep a note of other influences, such as weather, events, availability or changes to opening hours.
Ask the team what they are seeing and listen to customer feedback. Decide when you will review the change and what would make you keep it, adjust it or reverse it.
You do not need a complicated model to make a more considered decision. You do need reliable definitions, reasonable assumptions and a way to see what happened. The till reports guide can help with that comparison.