How to Price Your Seasonal Menu
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A seasonal menu is a sure way to keep things interesting for your customers (and you kitchen staff). New items add a level of excitement to the menu but they can also add complications, especially when it comes to pricing. Just how much should you be charging for that special menu item?
That’s what we’re here to discuss!
The key to making seasonal menu pricing as simple as possible is to have a formula and to stick to it. And no we don’t mean a secret formula for that mouthwatering bearnaise sauce you plan on serving up (although that’s never a bad idea, either). We mean a formula for pricing your new menu items. And the good news is that this formula can (and should) be pretty simple.
Calculate Your Costs
The most important number in your pricing equation is your gross profit margin. This is the amount of money you have after accounting for all of your expenses. We recommend aiming for a gross profit margin of around 20 percent—for every hundred dollars that come into your restaurant, you should have 20 leftover after paying out your expenses.
It helps to categorize your expenses so you can easily see just where your money is going. While you may want to dig into the costs and really narrow them down, we suggest starting with three broad categories: physical space, staffing, and food/beverage. And we recommend budgeting these at around 20%, 30%, and 30% respectively. That leaves you with the recommended gross profit margin of 20%.
Adjust For Seasonal Expenses
Your costs for your physical space and your staffing probably won’t change much with your seasonal menu, unless you’re planning to staff up for a busy season or offer expanded seating (like an outdoor patio). In this case, the changes could be significant. If that’s the case, you’ll need to factor those added expenses into your everyday menu—not just your seasonal items. Otherwise, the pricing won’t line up with the rest of your menu!
As for your food costs, you’ll have to pay attention to the prices of seasonal ingredients. You’ll likely find your best deals through your established food vendors, but it’s always important to shop around (if your vendor contracts allow it) to find the best price on any ingredients you plan on serving up as part of your seasonal menu. The lower the ingredient cost, the more savings you can pass along to the customer.
Now, If we stick to our formula above, food costs should stay at about 30% of all the money coming into your restaurant. We suggest planning that directly into the final price of the item—if your new seasonal ingredient costs $1, you should plan on selling it for at least $3.
But this is where you’ll need to know your audience—sure, you could price your special Spring Chicken Sandwiches at $25 a pop, but will your clientele actually pay that? Better yet, will they pay that and think it was worth it enough to order it again or recommend it to their friends? If the answer is no, you could be pricing yourself out of business.
So how do you find the optimal price for your customers, while still keeping profit margins healthy?
Trust in the Data
A good Point-of-Sale system will make it easy to see how much you’re selling any particular item, including your rotating seasonal specials. You’ll be able to monitor the data directly to know if your seasonal items are doing their job and generating sales. A good POS will let you generate reports with this data, so you can see exactly what your new seasonal expenses are and whether or not the sales are making it all worth the effort.
If your current POS system can’t do this for you, then your seasonal menu isn’t the only thing that’s due for a change!