How to Price a Set Menu or Fixed Price Menu for a Restaurant (UK Guide)

The short answer: price your set menu by costing every dish on it, adding up the total ingredient cost per head, then dividing by your target food cost percentage — typically 25–35% for UK restaurants. At a 25–35% food-cost target, a set menu costing £9 per head in ingredients works out at roughly £31–£43 including VAT. Then sense-check that figure against VAT, your local competition, and what your customers will actually pay.

That's the core formula. The rest of this guide walks through each step properly, because the details — VAT, yield loss, the "free" extras, and course mix — are where most set menus quietly lose money.

Step 1: Cost Every Dish on the Menu

Before you can price anything, you need to know what each course actually costs you. That means a proper recipe costing, not a rough guess.

For each dish:

• List every ingredient, including oil, seasoning, butter for finishing, garnishes, and any bread or amuse-bouche served alongside.
• Cost by usable weight, not purchase weight. A whole salmon at £14/kg is not £14/kg once you've removed skin, bones and trim. If your yield is 70%, your real cost is £20/kg. This is the single most common costing error in UK kitchens.
• Use current supplier prices. With the food inflation the UK has seen over the past few years, a costing from 12 months ago is fiction. Recost at least quarterly, or whenever a key supplier reprices.
• Include the hidden extras. Butter on the table, petit fours with coffee, the lemon wedge on the fish — on a set menu these apply to every cover, so they add up fast.

Add up the full per-head cost across all courses. If guests choose between options (e.g., two starters, two mains), cost the most expensive combination, not the cheapest. That's your worst case, and your price needs to survive it.

Step 2: Apply Your Target Food Cost Percentage

Once you know the cost per head, divide it by your target food cost percentage:

Menu price (ex-VAT) = ingredient cost per head ÷ target food cost %

Typical UK targets:

• Fine dining / tasting menus: 28–35% (higher labour justifies a higher food cost)
• Casual dining set menus: 25–30%
• Pre-theatre / early bird menus: 28–32% (these are volume drivers, so margins are tighter by design)

Example: your three-course set menu costs £8.50 per head in ingredients, and you want a 30% food cost:

£8.50 ÷ 0.30 = £28.33 ex-VAT → £34 inc-VAT at 20%

So you'd likely price it at £32.50–£35 depending on positioning.

Step 3: Don't Forget VAT

This trips up a lot of new operators. For a VAT-registered business, most restaurant and catering sales are standard-rated at 20%, so the customer-facing menu price normally includes VAT. Registration is required once taxable turnover exceeds £90,000, although special or temporary VAT rules can apply to some supplies. Your food cost percentage should always be calculated against the ex-VAT selling price.

A £30 set menu is really £25 of revenue. If your ingredients cost £8.50, your true food cost is 34%, not the 28% it looks like at first glance. Always do your maths ex-VAT, then add VAT back on at the end to get the menu price.

Step 4: Engineer the Course Mix

A set menu's profitability depends on what people actually order, not just what's theoretically possible.

• Anchor with one high-margin option per course. If your chicken main costs £3.20 and your sea bass costs £6.80, make sure the chicken is genuinely appealing — great description, good positioning on the menu — so a healthy share of guests choose it.
• Use supplements for expensive items. "Dry-aged sirloin — £6 supplement" is standard UK practice and customers accept it. It lets you offer premium dishes without blowing up the base price.
• Watch the dessert course. Desserts are often low food cost (a panna cotta might cost 60p) but they still carry labour and plating time. They're usually your margin rescue course — don't skip costing them just because they're cheap.

Track actual sales mix for the first few weeks. If 80% of guests pick your most expensive option at every course, your real food cost is higher than planned and the price needs adjusting.

Step 5: Check It Against the Market

Costing gives you the floor; the market gives you the ceiling.

Look at comparable restaurants within a mile or two. If every decent local competitor does three courses for £28–£35, pricing yours at £48 needs a clear justification (better ingredients, bigger portions, stronger brand). Equally, don't underprice — a £22 three-course menu today may signal tiny portions or a business that hasn't done its sums, and it leaves you no room when supplier prices rise.

Also consider the job the set menu is doing:

• Pre-theatre/early evening menus exist to fill dead seats. A slimmer margin is fine if those covers would otherwise be zero — but they must still cover ingredient cost plus a contribution to labour.
• Sunday lunch or midweek set menus drive volume and introduce new customers. Price them as a genuine value offer, but never below cost.
• Celebration/tasting menus are premium products. Price them on experience, not just food cost — but still know your numbers.

Step 6: Stress-Test the Margin

Before printing the menu, run the numbers at realistic volumes:

1. Contribution per cover: ex-VAT price minus ingredient cost. On a £35 menu (£29.17 ex-VAT) costing £8.75, that's £20.42 per head towards labour, rent and profit.

2. Break-even covers: how many set-menu covers per service do you need to cover the fixed costs of that service?

3. Price-rise buffer: if your protein cost jumps 15% next quarter, does the menu still work? If not, build in headroom now or plan a supplement structure that lets you flex.

Common Mistakes to Avoid

• Costing the cheapest combination instead of the most expensive one.
• Forgetting VAT when calculating food cost percentage.
• Ignoring yield loss on meat, fish and prepped vegetables.
• Never recosting. Set menus often run for months; supplier prices don't stand still.
• Copying a competitor's price without knowing your own costs — their margins (or their mistakes) aren't yours.

The Bottom Line

Pricing a set menu well comes down to three things: an honest per-head ingredient cost (including yields and extras), a target food cost of 25–35% calculated ex-VAT, and a sales mix you've actually tracked rather than assumed. Get those right and a set menu becomes one of the most predictable, profitable things your kitchen does — tight prep, low waste, known margins.

If you want to skip the spreadsheet wrangling, try the free food cost calculator at getprepsheet.com/calculator to cost your dishes quickly, or grab one of the ready-made Excel costing templates in the shop at getprepsheet.com/shop — they'll handle the yield and portion maths so you can focus on the menu itself.