How-to Increase Restaurant Food Pricing in 2023
Restaurant Food Pricing Tip #1: Look at Your Competitors
This tip is probably the easiest one to do, yet one that is often overlooked by restaurant owners.
Find out what your competitors are charging!
When was the last time you went online to look at your competitors’ menus?
Or gone into nearby restaurants to try the food and see what they are charging?
In the grocery store industry, it’s compulsory for floor managers to go shopping at their competition every single week because it changes so much.
The same should be done in hospitality.
Take a look at what competitors are charging and ask yourself, if it’s less, why is it less? If it’s more, why is it more? A better experience? Is the plate twice the size?
We could spend all day doing internal calculations for you, but you won’t get the complete landscape and answers you’re after without checking out the competition.
If you are significantly lower priced for relatively comparable restaurants in your area, it’s time to raise your prices.
Restaurant Food Pricing Tip #2: Make Your Cheapest Entree More Expensive
The next tip we like to share with our clients is to price your cheapest entree slightly higher.
Let’s think about why people come to your restaurant.
Do they crave your food? Do they love your drinks? Do they enjoy the atmosphere?
On a first date? Meeting friends? Blowing off steam after a long day at work?
Whatever the reason is, sometimes people are just there and want to get the cheapest entree on the menu.
If your cheapest entree is $18, they are going to pick it because it’s the cheapest one.
We recommend making the floor a higher “floor”, because many times people pick the cheapest option simply because it’s the cheapest.
If the lowest entree is $21, they’ll pick the $21 one. Because it’s the cheapest.
It won’t stop them from buying a drink, sharing an appetizer, or spending money in other places.
Restaurant Food Pricing Tip #3: Change Up Something About Your Menu
If you’ve found that you’re behind on pricing compared to competitors, you can’t just raise your prices by $4 and serve the same plate of food.
You could… but regulars to your business won’t be happy.
Our recommendation is to tweak your dishes a little bit along with your pricing.
Have a different sauce. Try new flavor combinations. Improve the presentation.
These are all things that can justify the price increase in the eyes of customers.
We don’t want you to necessarily increase the cost of the dishes, but rather make the food seem a bit different and improved to your customers.
Your food, but with a twist.
Restaurant Food Pricing Tip #4: Skip the Service Charge
Last but not least, our last tip is more of a “what not to do” when you’re raising prices.
Skip the arbitrary service fees and charges.
Customers do not understand what they’re for, and they don’t like seeing a surprise charge on top at the end of the night.
They don’t care if that pizza is an extra $1, they’re eating it, they understand it.
They don’t want a miscellaneous surprise service charge at the end.
If you need the service charge in order to make a profit, it means your pricing is wrong, or you’re overspending somewhere for costs or labor.
You shouldn’t have to charge those fees to make a profit.
Nobody will notice the price raise, but they will get angry if you charge a fee that they don’t understand and isn’t relevant.
Need Help With Your Restaurant Food Pricing?
Is it time to review your profit margins, and more specifically, your restaurant pricing?
At U-Nique Accounting, that’s our job! It’s what we’re here for.
We help restaurant owners review their finances and find opportunities to take home more money at the end of every month.
If you’d like to see how we can help, you can book a complimentary first call anytime.
Simply use this quick form or our calendar below to get started.
Until next time!