Pricing Your Menu With Confidence

Contribution margin, not food cost percentage, should drive your menu decisions.

Food cost percentage is a ratio. Your rent, propane, and payroll are paid in dollars. A 34 percent item that contributes nine dollars often beats a 24 percent item that contributes four.

Rank your menu by contribution margin and volume. Promote the top-right quadrant, re-engineer the bottom-left.

Change prices in small, frequent steps rather than one annual shock.

Anchor with a premium item so your mid-tier looks like the obvious choice.