Menu Engineering: Menu Pricing Strategies and Solutions

An entire book can be written on menu pricing strategies. We’ll answer some of the biggest concerns and most frequently asked questions about menu pricing strategies and solutions for restaurants.

Menu Engineering Menu Pricing Strategies
Menu Engineering Menu Pricing Strategies

Menu Pricing Strategies and Solutions

Frequently Asked Question: Do cents make sense?

One of the questions I’m often asked though is how to handle the cents. Should we round it up or down? Should we use $.99 or $.95. What if the target cost meant a menu price of $8.25? Personally I believe many of these issues to be rooted in the overall concept strategy, not just the semantics of menu pricing. Meaning, it would be much more appropriate for a high-end martini lounge to round their prices to flat amounts versus quirky pricing (i.e. it’s $11, not $10.95; but if the same costs were true for family oriented casual dining restaurant the more concept-appropriate approach may be the other way around.)

Pricing Art and Science

That said, pricing is both an art and a science. The science part should be rooted in achieving target theoretical food costs and profit margins. The art part of it though is how to make the science part more appetizing and appealing. A restaurant that charged $7.43 for an item just because that is the exact price that would give them exactly a 31% food cost would be peculiar.

Aaron’s Recommendations

Generally, my recommendation is to use as few digits as possible and never use a dollar sign. I also frequently recommend to round up and offer a better value than to round down and pinch both the restaurant’s profits and customers experience. Also, price the menu in such a way that it cannot be easily compared or price shopped against the competition. I have frequently seen restaurants that were overall lower than their competitors but perceived as higher just because having a poor pricing strategy on just a few key items.