Cafe/Restaurant prices

[Deleted member 348911]

Hi, we took over a business at the wrong time and now have to deal with huge energy prices.

We increased menu items by 50p but staff have their opinions of it being too much. I fully take in board what they say, I hated increasing it!

I've since worked out how much each ingredient costs per portion used so I can work out how much a menu item is, this is without energy, labour etc.
Is there a 'go to' calculation / mark up % I should be looking for when figuring out how much to sell the item for?

I'm wondering whether I lower prices in the hope that more people come visit but the risk in doing that could harm us too. I just don't know what to do.

Coffee ranges from £2.20-3.50, sandwiches between £4.30-5.50
Jacket potatoes around £5.50, homemade burgers in bun £6.75 etc

I'm reviewing the entire menu and prices, I want to make everyone happy but I can't.

 

[Mark T Jones]

The pricing benchmark is typically 3 - 4 times ingredient cost.

Your staff's view of pricing isn't what matters - what matters is your customers' views (they will seldom say they want higher prices, but will vote either way with their feet). That partly depends on local competition and whether you have a decent USP

One thing I have seen is an 'energy surcharge ' which is worth considering

Dropping prices is usually a race to the bottom, unless it's tied in with a coherent marketing strategy

 

[Paul Kelly ICHYB]

I've since worked out how much each ingredient costs per portion used

That should have been one of the first things you did!

staff have their opinions of it being too much

So, if you say to the staff that if things do not improve there will not be a business and they will not have a job, maybe they could make suggestions?

Is there a 'go to' calculation / mark up % I should be looking for when figuring out how much to sell the item for?

There are several ways of doing this by a 3x or 4x multiplier on cost is not unusual.

I'm wondering whether I lower prices in the hope that more people come visit

How will you attract these new customers? Why not either keep prices as they are or increase prices and also promote the business?

I want to make everyone happy but I can't.

You never will!


What is your competition selling products for? Are they busier or quieter?

 

[Paul Norman]

In addition to the above, I would pop into a rival cafe and see what prices they are charging.

I would say your prices for coffee are top end, your prices for a burger are fairly low - as a statistically non significant comparison the nearest cafe here are charging £8 for a burger.

Of course, your place might be more appealing than theirs.

 

[The Byre]

Food costs - the rule of thumb is never more than one-third, though you can go far lower than that with small dishes and appetisers. One guy I knew sold umpteen French onion soups - as many as 50 in one night - for £4.95 each. All it was, was freshly fried onions in veg. stock with a pinch of brown sugar, a little salt, a squirt of Tabasco and with melted cheese on top and a slice of toast on the side. The food cost was less than £1 a bowl and was prepp'ed during the day, so serving took a minute or two.

The trick is to sell what the punters can get nowhere else. So if it comes out of a packet, a jar, or a tin, throw it in the bin! For example, every greasy spoon offers mayonnaise and ketchup that are cheap store-bought rubbish. Making your own is cheap and easy and sets you apart from everyone else!

People buy food because it tastes nice. Making things taste nice means using ingredients that the punter cannot get at home or is unlikely to have thought of. Store-bought this and store-bought that is what it is! Store-bought - and therefore cheaper (and often better!) at home. Why pay £3.50 for coffee when I can get freshly roasted and ground coffee at home for a fraction of the price? (And the smell of coffee roasting will pull the punters in off the street like nothing else you could do!)

 

[Paul Kelly ICHYB]

Picking up on the burgers, great that they are homemade, but maybe create a name for yourself as being the local place for smash burgers or a similar twist.

 

[simon field]

the local place for smash burgers or a similar twist.

Smash burgers? What’s that?

 

[The Byre]

Why Smash Burgers Are the Best Burgers and How To Make Them | OMK

Simplicity is so often best and that’s why we feel there is one burger that smashes all other burgers out of contention: the smash burger.

www.ourmodernkitchen.com

 

[Paul Kelly ICHYB]

There you go! If Simon doesn't know It must be an opportunity!

It might be a quick trend, but getting on the wave now could be a shot in the arm. Add a bit of social media activity and you could create a local/regional hotspot!

 

[japancool]

The trick is to sell what the punters can get nowhere else. So if it comes out of a packet, a jar, or a tin, throw it in the bin! For example, every greasy spoon offers mayonnaise and ketchup that are cheap store-bought rubbish.

If my local greasy spoon sold store-bought mayonnaise, that would be an upgrade! They use the cheap stuff that comes in gallon buckets, and it's horrible. Tastes more like salad cream. Bad salad cream.

 

[HFE Signs]

Generally speaking. people are always happy to pay a little more if they like what they're getting - you only risk losing customers if they feel the value isn't there.

Also, a loyalty system might work well for you?

 

[The Byre]

If my local greasy spoon sold store-bought mayonnaise, that would be an upgrade! They use the cheap stuff that comes in gallon buckets, and it's horrible. Tastes more like salad cream. Bad salad cream.

That magical Brakes experience! Spaghetti that dissolves into a paste, mayo that is just flour and sugar with acetic acid. My favorite was always ketchup and scrambled eggs that you buy as a powder (do they still do those culinary delectables?) KFC used to use that stuff. ("Come to us for that real World War Two feeling!")

 

[Mark T Jones]

I thought I'd jump in, as there is a risk of this thread going down the dangerous route of most F & B threads - ie people advising what you should / shouldn't sell, without focusing on the one thing that really matters.

The customer!

• Who are they?
• What motivates them?
• How can you get your hand into their pocket - deeper and/or more frequently?

That will determine whether you source food from Brake Brothers or your local butcher/farmer's market, not the preferences of random people on forums.

To add a few gratuitous puns:

Food for thought:

Most successful food chains serve product that is average at best. Sometimes well below average.

Most 'top'- restaurants live on a permanent knife-edge. Particularly those owned by celebrity chefs.

A restaurant is a business like any other. Find your customer and build your offering around them, otherwise you will only ever be guessing.

 

[Drax35]

I thought I'd jump in, as there is a risk of this thread going down the dangerous route of most F & B threads - ie people advising what you should / shouldn't sell, without focusing on the one thing that really matters.

The customer!

• Who are they?
• What motivates them?
• How can you get your hand into their pocket - deeper and/or more frequently?

That will determine whether you source food from Brake Brothers or your local butcher/farmer's market, not the preferences of random people on forums.

To add a few gratuitous puns:

Food for thought:

Most successful food chains serve product that is average at best. Sometimes well below average.

Most 'top'- restaurants live on a permanent knife-edge. Particularly those owned by celebrity chefs.

A restaurant is a business like any other. Find your customer and build your offering around them, otherwise you will only ever be guessing.

This is such a good post, please take heed of this man's advice.

There are plenty of cafes and takeaways doing a roaring trade using cash & carry fodder. There are towns near me where it'd take a very brave man to tell the locals the prices were going up to pay for homemade mayonnaise.

People don't just buy food because it tastes nice. It does help, but convenience is probably highest on most people's list at lunchtime.

If they operate in your area get onto UberEats, Deliveroo etc - you can whack your app prices up to pay the service fees which in turn will make your in-store pricing seem more reasonable.

 

[WaveJumper]

Why Smash Burgers Are the Best Burgers and How To Make Them | OMK

Simplicity is so often best and that’s why we feel there is one burger that smashes all other burgers out of contention: the smash burger.

www.ourmodernkitchen.com

Think you all watched the same documentary as me the other week. I never realised the smashed burger had such a big following

 

[Onthebrightside]

I suppose you've already reviewed the menu to see if you could narrow it (remove anything that has extremely expensive ingredients) leave the rest and bulk buy in the remaining core ingredients?

 

[BubbaWY]

I suppose you've already reviewed the menu to see if you could narrow it (remove anything that has extremely expensive ingredients) leave the rest and bulk buy in the remaining core ingredients?

Spot on. Thats one thing me and my wife did when she had a cafe. Try and limit the menu options which only uses one ingredient. Or, offer more menu options which uses that ingredient. Limiting waste is a huge factor in your margins.

As an example, my wife did advocado and egg on toast but was regularly throwing out advocados which had turned rotten. And they arent cheap to buy. So she binned it off the menu. The regulars who would buy it still came in but just choose something else.

 

[Mark T Jones]

Spot on. Thats one thing me and my wife did when she had a cafe. Try and limit the menu options which only uses one ingredient. Or, offer more menu options which uses that ingredient. Limiting waste is a huge factor in your margins.

As an example, my wife did advocado and egg on toast but was regularly throwing out advocados which had turned rotten. And they arent cheap to buy. So she binned it off the menu. The regulars who would buy it still came in but just choose something else.

To quote Ken Hom 'If you want to improve profits, start by looking in the bin'

Similarly, look closely at all aspects of your energy consumption - sounds obvious but is often overlooked,

 

[UKSBD]

People don't just buy food because it tastes nice. It does help, but convenience is probably highest on most people's list at lunchtime.

Not a restaurant but similar.

After doing a shop in town I would look forward to getting a nice bacon bap or pork bap from a local butcher on the way back to car.

They moved from point A to point B on the attached map and I've barely had one since.

 

[Onthebrightside]

Spot on. Thats one thing me and my wife did when she had a cafe. Try and limit the menu options which only uses one ingredient. Or, offer more menu options which uses that ingredient. Limiting waste is a huge factor in your margins.

As an example, my wife did advocado and egg on toast but was regularly throwing out advocados which had turned rotten. And they arent cheap to buy. So she binned it off the menu. The regulars who would buy it still came in but just choose something else.

Totally agree, obviously anything that can be cooked from frozen is always good in terms of keeping your waste down. Also, I am always surprised when people buy in cocktail sauce, since mayonnaise mixed with tomato sauce does the trick!

 

[Paul Kelly ICHYB]

Think you all watched the same documentary as me the other week

No. Videos started appearing on my FB feed a couple of years ago!