Work out what one portion costs you on usable weight, pick the food cost percentage you want, and divide: menu price = cost per portion / target food cost %. A dish that costs QAR 8.00 to make, priced for a 30% food cost, sells at about QAR 26.67, which you round to QAR 27. Then check the price against your market, and redo the sum whenever a supplier price moves.
Many guides stop at the formula and use dollars. Three things decide whether the price holds in Qatar: the yield you cost on, the target you choose, and how fast you notice a cost change. The five steps below cover each one.
Key takeaways
Menu price = cost per portion / target food cost %, so a QAR 8.00 dish at a 30% target sells at about QAR 27 (example numbers).
Cost each ingredient on usable weight after trim, not on the weight you buy.
Review a dish whenever a supplier price for one of its ingredients changes.
Wady Central keeps recipe cost current and flags a dish that goes over your target food cost, but you set the menu price.
What are the steps to price a menu item from food cost?
Five steps, in this order.
Cost the portion on usable yield.
Choose a target food cost %.
Divide: price = cost / target.
Round, then check the market.
Review when costs move.
Each step has its own section next. For the full cost formula and the monthly stock method, read how to calculate food cost. This page starts where that one ends: turning a cost into a price. A National Restaurant Association (US) piece on menu pricing strategy says costing must be accurate before pricing, and quotes food cost targets of about 24 to 26 percent.
Step 1: How do I cost one portion (cost per portion formula)?
Cost one portion by adding every ingredient in the dish, priced on what you can serve, plus packaging. The word that matters is usable. You pay for the whole chicken breast and serve what is left after trimming and cooking loss.
Cost per usable kilo = purchase price per kilo / usable yield %
Include sub-recipes such as a sauce or dough, oil, and takeaway packaging. Leave none out because it is small. Ten small items of QAR 0.30 each add QAR 3.00 to a plate.
Example only. Invented numbers. A grilled chicken sandwich:
Line | How it is counted | Cost |
|---|---|---|
Chicken breast | QAR 24 per kilo, 80% usable = QAR 30 per usable kilo. 150 g usable. | QAR 4.50 |
Bun | One bun | QAR 1.20 |
Lettuce, tomato, sauce | One serving | QAR 1.30 |
Packaging | Box, wrap, napkin | QAR 1.00 |
Cost per portion | QAR 8.00 |
Now see what skipping yield does. Cost the chicken at the raw QAR 24 per kilo and it shows QAR 3.60, so the portion looks like QAR 7.10. At a 30% target that gives a price of QAR 23.67 instead of QAR 26.67. You would undercharge by QAR 3.00 on every sandwich, and the sheet would still look correct.
See recipe costing software for what to look for in a tool that does this for you.
Step 2: What target food cost percentage should I use?
Use the target your concept can carry. Common industry guidance puts restaurant food cost between about 28% and 35% of the menu price. This is a general range, not a Wady figure. Your own number depends on rent, labour, portion style and what your guests expect to pay.
Pick the target by working backwards from your other costs:
A high-rent location or a large team usually needs a lower food cost %, so more of each riyal is left to cover them.
A quick-service menu with low labour per plate can carry a higher food cost %.
A signature dish can run at a higher food cost % if side items and drinks run lower. Balance the whole menu, not each dish alone.
Write the target down for each menu section. Without one, every price becomes a guess made on the day.
Step 3: How do I turn cost into a price?
Divide the cost per portion by the target food cost %, written as a decimal. At 30%, divide by 0.30. The table shows the same sandwich, with the same QAR 8.00 cost, at five targets.
Example only. Invented numbers.
Target food cost % | Cost / target | Rounded price | Actual food cost % | Left after food cost |
|---|---|---|---|---|
25% | QAR 32.00 | QAR 32 | 25.0% | QAR 24 |
28% | QAR 28.57 | QAR 29 | 27.6% | QAR 21 |
30% | QAR 26.67 | QAR 27 | 29.6% | QAR 19 |
33% | QAR 24.24 | QAR 24 | 33.3% | QAR 16 |
35% | QAR 22.86 | QAR 23 | 34.8% | QAR 15 |
A lower target means a higher price and more margin on each plate. It also means fewer plates sold if your guests balk. The formula gives you the price the cost needs. Step 4 tells you whether the market will pay it.
Step 4: How do I round the price and check it against the market?
Round to a price your guests read easily, then recompute the food cost % at that price. The table above does this: QAR 26.67 became QAR 27 and the food cost % moved from 30.0% to 29.6%.
Rounding up costs you nothing in food cost %. Rounding down raises it, so check the new number before you print the menu. Pick whole riyals or half riyals and stay consistent across the menu.
Then check the market:
Look at what similar places near you charge for a comparable plate. Use your own visits and the menus you can see.
Compare portion size and quality, not only the price.
If the formula price sits far above the market, you have two options. Lower the cost, with a smaller portion, a different ingredient or a cheaper supplier quote. Or accept a higher food cost % on that dish and make it up elsewhere on the menu.
If the formula price sits below the market, you may be underpricing. Test a small increase.
The market check can raise the price or hold it. It does not remove the cost. A dish priced under its cost target loses money on every sale, however busy the room is.
Step 5: Why do my menu prices go out of date, and when should I review them?
Your menu prices go out of date because supplier prices move and the menu does not. The cost on your sheet is the cost on the day you wrote it.
Example only. Invented numbers. Say chicken rises from QAR 24 to QAR 27 per kilo. At 80% usable, a usable kilo now costs QAR 33.75. The sandwich costs QAR 8.56, not QAR 8.00. At the QAR 27 menu price, food cost % goes from 29.6% to 31.7%. Over 1,000 sandwiches a month that is about QAR 560 more, and nothing changed in the kitchen or on the menu.
To hold 30% you would need a price of about QAR 28.54, so QAR 29. You only know that if you know the cost moved.
Review in these cases:
A supplier price changes on any ingredient in the dish. This is the main trigger.
You change a portion, a recipe or a supplier.
You count stock and the monthly food cost % comes out above target. Recipe cost and period cost have different jobs, see how to calculate food cost and restaurant stock count.
On a fixed date, for example every quarter, for the dishes that sell most.
Reviewing does not mean raising every price. Sometimes the answer is a smaller portion, a different supplier or a dish dropped from the menu.
What goes wrong with menu pricing on a spreadsheet?
A spreadsheet works for a few dishes and one person who owns the file. It starts to fail when prices move often. The cost per portion on the sheet stays the same until someone types the new ingredient price, then checks which recipes use it, then updates each menu price. In a National Restaurant Association (US) article on menu price increases, 91 percent of surveyed operators had raised prices, and the pricing expert advised smaller, more frequent increases. Stock across outlets is covered in restaurant inventory management. More on tools is in recipe costing software.
Spreadsheet | Costing linked to purchasing | |
|---|---|---|
Price change | Someone retypes it and finds the affected recipes by hand | Recipe cost recalculates when the price changes |
Usable yield | A column you update by hand | Yield stored with each ingredient |
Which dishes moved | You compare old and new sheets | A list of recipes that moved, with the ingredient behind each |
Wrong digit | Stays until someone spots it | Odd numbers are questioned as they are typed |
Suits | A few dishes, one owner of the file | Many recipes, several outlets, prices that move |
How Wady helps with menu pricing
Wady Central is Wady's paid system for stock, recipes, purchasing and costing, built in Qatar, from one café up to a multi-branch group. It does not set your menu prices. It keeps the cost side of your formula true, so the price you choose rests on a current number.
Real yield. Recipes are costed on usable weight after trim, so cleaning loss sits in the price.
Your sheet, as it is. Your costing spreadsheet imports with your own columns.
Re-costed when a price moves. Price rises and falls are flagged on delivery, and the recipe is re-costed that moment.
Sub-recipes, packaging and food cost % sit in the same recipe.
What changed, and why. The Daily Brief, a morning read for the owner, lists the recipes that moved cost and the ingredient that moved them, in riyals.
Menu and margin reports. Wady Central shows menu and margin reports and flags a dish that goes over your target food cost. It does not set or sync menu prices.
From an example screen in Wady Central: butter came in dearer, and a butter croissant moved from QAR 1.2262 to QAR 1.3078 per portion (+6.65%), with butter behind 88% of the move. The same page showed 5 recipes that moved cost, QAR 12.00 cost of the rises and QAR 8.00 value of the falls. See the pricing page for the plans. Stock, recipes and costing sit in the paid Wady Central.
That list tells you which menu prices to look at first. Wady Central works alongside the POS and accounting you already have. You can export all your data any day, free. Over 100 businesses in Qatar already use Wady, including Crave Holdings and OMC.
See recipes and costing, purchasing and the Wady Central overview. A walkthrough on your own setup takes 20 minutes.
FAQ about menu pricing from food cost
What is the formula to price a menu item?
Menu price = cost per portion / target food cost %. A QAR 8.00 portion at a 30% target gives QAR 26.67, rounded to QAR 27 (example numbers).
What food cost percentage should a restaurant aim for?
Common industry guidance is about 28% to 35%. It is a general range, not a Wady figure. Your target depends on rent, labour, portion style and your guests.
Should I cost ingredients at the price I pay or at usable weight?
Use usable weight. You pay for the full weight and serve what remains after trimming and cooking. In the example, raw costing understates the chicken by QAR 3.00 per sandwich at a 30% target.
How often should I review menu prices?
Review a dish whenever a supplier price for one of its ingredients changes, and again when you change a portion, a recipe or a supplier. Also set a fixed date, such as every quarter, for your top sellers.
Does Wady Central set my menu prices?
No. It costs your recipes on usable yield, re-costs them when a supplier price moves and shows which recipes changed. You set the menu price.
See which of your recipes moved cost
Talk to the Wady team. We will walk you through recipes and costing on your own costing sheet in 20 minutes.
Frequently asked questions
Your kitchen's stock, recipes and costing, with numbers from real records.
