menu pricing

Your menu pricing strategy can help your restaurant get ahead

As inflation continues to rise and labour shortages persist, it may be time to look at your menu pricing strategy as a way to cut costs and raise profits. As a restaurateur, you know it’s a balancing act to keep customers happy and stay in the green.

Understanding how to create a menu pricing strategy can get you closer to achieving that goal.  

In TouchBistro’s recent interview with David Scott Peters, restaurant coach and menu pricing strategy expert, he explains that your menu pricing strategy can include everything from your style of service to price point to guest demographics, the quality of your products, and your core values.

Key factors

It starts with having a realistic budget, including your labour and food costs. Next, you need to understand your prime cost; for every dollar that comes in, figure out how much of that dollar needs to be allocated to people and product before any bills are paid.

Finally, determine your ideal food costs based on customers. It may be tempting at this point to conclude that raising prices is the answer, but Peters suggests it’s often a case of becoming more efficient instead.

After doing the math, you need an understanding of key software and some menu engineering know-how to be well on your way to a winning menu pricing strategy.


Use your point of sale (POS) software to look at your food costs and sales. This is a simple way to track everything your customers have purchased and use that data for your ideal food cost. Restaurant software can also help manage your spending, with things like budgets, profit and loss analysis, price changes, and more. Your software allows you to access the information you need to fine-tune your menu pricing strategy.

Menu engineering

You can always tweak your strategy with menu engineering to optimize sales and bring up your bottom line. Layout is one way to direct your guests to make certain purchases.

“If I have 10 items side by side, the first, second, and last items will sell more than anything else. But, I put a box around them, the boxed menu items will outsell the first, second and last,” says Peters. Another trick is to use a photo to draw the eye to a featured product, “That product will outsell the first, second, last, and boxed item!”

Eye movement patterns also play an important role in your strategy, like highlighting menu panels to draw the eye to your featured products. According to Peters, items sell the best in the top-right panel of your menu, because that’s where the eye is naturally drawn. Putting featured products in that location will influence customers to purchase those products.

Addressing restaurant costs isn’t as simple as increasing your prices to make more money. Knowing which metrics are important, getting the data, and marketing wisely are some of the ways your menu pricing strategy can help you save money and increase your restaurant’s profitability. 

Check out the full interview here.