Inflation-Proofing Your Restaurant Menu
TL;DR: Menu items that lose money are often your most popular dishes. High demand hides poor margins. A proper menu profitability analysis reveals which dishes actually earn and which ones just feel like success.
Some menu items that lose money are obvious traps: the dish that requires three hours of prep, a specialist ingredient you can only source from one supplier, and a portion size that grew incrementally because the chef felt guilty. But the ones that will genuinely unsettle you are the popular ones. The dishes your regulars ask for by name. The items that sell twenty covers on a quiet Tuesday and still somehow leave you wondering where the margin went.
I once ran a roast chicken on a lunch menu. Proper bird, good provenance, cooked well. Sold brilliantly. My GP on it was somewhere in the low twenties, percentage-wise. The table next to it on the menu, a simple leek and Gruyère tart, barely sold at all. Its margin was nearly double. The chicken felt like success. The tart was the one doing the actual work.
There is a particular kind of kitchen pride that attaches itself to a dish people order repeatedly. You start to equate demand with success, and in a dining room sense, that is understandable. A full restaurant feels like a win. But restaurant gross profit margins are not calculated in atmosphere. They are calculated in pence, and a dish can be beloved and financially catastrophic at the same time.
The problem is that most operators do not run a proper menu profitability analysis often enough, if at all. You cost a dish when you write the menu, forget about it for eighteen months, and meanwhile your protein supplier has put their prices up twice, your portion sizes have crept upward, and your junior chef is plating with a generosity that would make a Michelin inspector weep (with joy, unfortunately, not concern). By the time you notice the bleed, it has been going on for years.
The dish itself is not the villain. The absence of ongoing scrutiny is.
When I talk about menu items that lose money, I am not referring to dishes with obvious structural flaws. I mean the ones where the maths quietly turns against you over time, or where the maths was never quite right to begin with but the dish was too popular to question. There are a few recurring types worth knowing.
Any dish built around a primary protein, whether that is beef, lamb, crab, or a good sustainable fish, carries a food cost that moves with the market. Your menu price does not. Customers have a mental anchor for what a dish costs, and if you shift that price by more than a pound or two without warning, you will hear about it. Meanwhile the wholesale cost of that protein may have increased by fifteen or twenty percent since you last repriced. The gap between what you charge and what you actually spend quietly widens in the wrong direction.
Labour cost is often excluded from dish-level costing, and that is a significant oversight. If a dish requires forty minutes of skilled prep per portion, that time has a value. In a full kitchen with a functioning brigade, you may absorb it. In a smaller operation, or during a period when you are down a chef, that same dish can quietly consume your evening. High margin menu design accounts for labour as honestly as it accounts for ingredients.
A dish that uses a component with a short shelf life and inconsistent cover counts will cost you more than its recipe card suggests. If you make a fresh pasta for sixteen portions every service and sell eleven, that remainder does not vanish. It either gets repurposed, discounted, or binned. Multiply that across a week and the actual food cost is considerably higher than the theoretical one. Proper restaurant food cost control requires tracking actual usage against sales, not just running the numbers on paper.
The framework that has served me best over the years is a simple two-axis assessment. You look at how well a dish sells (its popularity) and how much gross profit it generates per cover (its contribution margin). Every dish on your menu falls into one of four categories.
This framework comes from menu engineering work first formalised by Michael Kasavana and Donald Smith in the early 1980s, and it remains the clearest model I have encountered for thinking about profitable menu engineering without disappearing into a spreadsheet for a week. The ‘dog’ label sounds harsh. It is meant to.
You have a few options, and none of them are comfortable. You can reprice it, accepting that some customers will grumble. You can re-engineer it, adjusting the recipe or portion to recover margin without visibly diminishing the dish. You can reposition it on the menu, making it less prominent so that higher-margin alternatives sell alongside or instead of it. Or, if the dish is genuinely integral to your identity, you subsidise it consciously and make sure the rest of your menu carries the weight.
What you cannot do is ignore it. That is how restaurants that look busy still fail to make money.
Building a menu that actually performs financially is not about removing everything customers love. It is about being honest with yourself regarding what each dish actually costs to produce and sell, and then designing the menu so that high-margin items are the natural choice. That means placement, description, server training, and portion discipline working together.
Eye-level menu placement, clear and appetising descriptions, and a server who genuinely understands which dishes they should be guiding customers toward will shift covers in the right direction without any of it feeling manipulative. It is just good hospitality with its eyes open.
Seasonality helps enormously here. A dish built around something at its natural peak costs less, tastes better, and gives you an honest selling point that does not require any marketing language. A plate of asparagus in May, dressed simply and sold at a price that reflects its brief window, is more profitable and more satisfying than the same asparagus flown in from Peru in January at three times the cost.
Start with a proper recipe costing that includes every component, including garnishes and cooking fats, priced at your current supplier rates. Calculate the food cost percentage by dividing the total ingredient cost by the selling price and multiplying by one hundred. If that figure is above thirty percent for most of your menu, you have a problem. If individual dishes are sitting at forty percent or more, they need immediate attention.
Not necessarily and not immediately. Before removing it, try re-engineering the recipe to reduce cost without reducing quality, revisit the portion size, and consider whether the selling price can be adjusted incrementally. Removal is a last resort. Customers do notice when a favourite disappears, and the goodwill you lose may cost more than the margin you were trying to recover.
At a minimum, every six months. If you are in a period of significant cost volatility, which has been most of the last few years for UK operators, quarterly is more sensible. At the very least, review your dish costings whenever a key supplier changes their prices. The menu you priced eighteen months ago is not the menu you are running today.
The commonly cited target for restaurant gross profit margins is a food cost of twenty-five to thirty-five percent, depending on the type of operation. Fine dining can absorb a higher food cost if average spend is elevated. Casual or volume-led operations need to sit lower. The number that matters most is your blended food cost across the whole menu, not any single dish in isolation.
The dish that sells and still bleeds you is the one worth your attention this week. Not the obvious failures, not the dishes nobody orders. The popular one. The one everyone assumes is fine because customers keep choosing it. Pull the recipe card, recost it at today’s prices, and see what you actually find. You might be surprised. You might also be slightly sick, which is how you know the exercise was worth doing.
Chef Ian McAndrew’s specialist eBooks and guides are available directly on ChefYesChef, including his technical titles and autobiography. If you want more practical, chef-led reading beyond this article, you’ll find the full collection here.
Chef Ian McAndrew works with chefs, businesses, and individuals on a wide range of culinary projects, from concept development to practical problem-solving.
If you’d like to talk through an idea or need informed guidance, you’re welcome to contact him.
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