How to price a menu in the UK: GP target first, then the dish next to it
Benn Asaraf ·
Most menus get priced by walking past the place down the road. You see their burger at £17, so yours goes on at £16.50. Then the invoices come in and nobody knows why the month was thin.
The neighbour's price is useful. It is just the second check, not the first.
Step 1: price from your GP target
Start with what the plate costs you. Every ingredient, with yield. (If you have not done that yet, how to cost a dish shows the method, and yield and waste shows why most plate costs are too low.)
Then pick your target GP. For food in the UK, most kitchens aim for 65 to 75%. (What should my food GP be goes into where in that range you should sit.)
The price before VAT is:
Price ex VAT = plate cost ÷ (1 − target GP)
Then add VAT for the menu price:
Menu price = price ex VAT × 1.2
Say a plate costs £4.80 and you want 70% GP.
- £4.80 ÷ 0.30 = £16.00 before VAT
- £16.00 × 1.2 = £19.20 on the menu
Nobody prints £19.20. So round it, and check what rounding does.
| Menu price | Ex VAT | Food cost | GP |
|---|---|---|---|
| £19.00 | £15.83 | 30.3% | 69.7% |
| £19.20 | £16.00 | 30.0% | 70.0% |
| £19.50 | £16.25 | 29.5% | 70.5% |
Fifty pence moves you nearly a point. On a dish you sell 300 times a month, that point is worth having.
Markup is not margin
This is where a lot of menus go wrong. "Three times cost" sounds like a GP rule. It is not.
A 3x markup means the price is three times the plate cost. The GP that gives you depends on whether the price includes VAT.
Same £4.80 plate:
| Rule | Menu price | Ex VAT | GP |
|---|---|---|---|
| 3x, ex VAT | £14.40 + VAT = £17.28 | £14.40 | 66.7% |
| 3x, on the menu price | £14.40 | £12.00 | 60.0% |
| 4x, on the menu price | £19.20 | £16.00 | 70.0% |
So "3x" on the price the guest pays gives you 60% GP. That is low for food. In the UK, with 20% VAT, roughly 4x on the menu price lands you at 70%.
The VAT step is the one most people skip. GP and VAT in the UK walks through it with numbers.
Step 2: check it against the dish next to it
Here is the thing. Your guest does not see your GP. They see your menu. They compare the cod to the chicken, and the chicken to the pasta.
So once every dish has a price from its GP target, read the menu as a guest would.
- Is the pasta more than the chicken? Most guests will feel that is wrong, whatever it costs you.
- Is one starter £4 above the others? It needs a reason on the plate.
- Do two mains sit 50p apart? Make the gap clear or make them the same.
Adjust, then check the GP again. Going down is fine if you know by how much.
Pounds in the till, not just percentages
Not every dish has to hit 70%. A steak never will at a price people pay. Look at the cash, not just the percentage.
| Dish | Plate cost | Menu price | Ex VAT | GP in £ | GP % |
|---|---|---|---|---|---|
| Ribeye | £11.00 | £32.00 | £26.67 | £15.67 | 58.8% |
| Pasta | £2.20 | £16.00 | £13.33 | £11.13 | 83.5% |
The pasta has the better percentage. The steak puts more pounds in the till per cover. You want both on the menu.
What matters is the whole menu, weighted by what you actually sell. If most covers order dishes at 70% or more, one 59% steak barely moves the average.
So set a target for the menu, not a rule for every line. Let the high-cost dishes run lower. Make the low-cost dishes carry them.
What does not count
A few things often get mixed into GP that should not.
- Service charge and tips. Since October 2024, UK law says tips and service charges go to staff in full. They are not your revenue. Leave them out.
- Drinks. Price them, but track them on their own line. A wine list at 70% can hide a food GP of 60%.
- Card fees and packaging for delivery. Real costs, but not food cost. Count them, just not here.
When to re-price
Prices on the menu move a few times a year. Prices on your invoices move every week. That gap is where GP disappears.
Pick a trigger. For example: if any dish drops three points below target, look at it that week. Change the portion, the garnish, the supplier or the price. Do not wait for the next menu print.
This is the part a spreadsheet does badly, because nobody updates it on a Tuesday. In Mise n' Price you scan the supplier invoice and every dish that uses those ingredients shows its new GP. You see which one slipped before the month closes.
The short version
- Price ex VAT = plate cost ÷ (1 − target GP). Then add 20% VAT.
- 3x on the menu price is 60% GP, not 67%. 4x is about 70%.
- Then read the menu as a guest. Fix the prices that feel wrong next to each other.
- Aim for the whole menu to hit target. Let steak run low and pasta run high.
- Leave tips, service charge and drinks out of food GP.
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Find the price for your target GP. Put in your plate cost and target in the free GP calculator. It gives you the menu price with VAT.
Want to see which dish slipped this week? Mise n' Price is in closed beta, free until 13 December. Apply for the beta.