Dramatic changes have taken place in the hotel industry's attitude toward food and beverage operations in the last ten years. The most significant change in attitude has been that food and beverage has become important as a potential source of new pro...
Dramatic changes have taken place in the hotel industry's attitude toward food and beverage operations in the last ten years. The most significant change in attitude has been that food and beverage has become important as a potential source of new profits.
The purpose of this study is to explain theories and methods for menu-pricing.
In the foodservice area, success is based on developing the right menu-pricing system. Each operator has the option of developing a system.
First requisite in menu pricing is to know for whom the menu is being planned and what they like to take. Pricing must fit the needs and desires of your makets.
Before looking at specific cost approaches to pricing, we need to set the stage. When pricing is based on a cost approach, four modifying factors to consider are historical prices, perceived price/value relationship, competition, and price rounding. These price modifiers relate to the pricing of nearly all products and services. A major method of pricing food and beverages is making up the cost of the goods sold. The making-up is designed to cover all non-product costs, such as labor, utilities, supplies, interest expense, taxes, and also to provide the desired profit.
Another basic concept used in menu pricing is the margin, or gross profit.
A third basic requirement of any menu-pricing system is a standardized recipe most operators are very concerned with cost percentages because they are easier to understand than absolute numbers. However, the cost percentage is a function of prices charged; Therefore the food cost percentage will be low if the prices charged are high.
There are also several informal approaches to setting prices for selling food and beverages.