Menu Development: Costing and Pricing Considerations

This presentation focuses on the considerations of costing and pricing menus in the hospitality industry. It discusses the impact of costs, staffing, and environmental policies on menu pricing. The presentation also includes examples of costed and priced menus to meet a range of customer requirements.

Menu Development,
Planning and design

Table of Content
 Introduction
 Considerations of costing and pricing of menus
 Costed and priced menus to meet a range of customer requirements
 Conclusion
 References

Introduction
For every firm operating in hospitality industry need to develop
attractive menu because it is a primary method to communicate with
customers. Cafe taken for this presentation is Pasco Cafe situated at
busy high street between office and railway station. Topics which are
explained in this presentation are related to cots as well as price of
menus.

Considerations of costing and
pricing of menus
While developing a menu or dish restaurant, cafe or hotel need to
consider number of things which help them in fixing cost of their
offerings. From that some main points are given below in respect
of Pasco Cafe:-

Cont...
The impact of costs and revenue from various sources
 Energy costs- According to this respective company owner
need to consider cost of energy incurred in developing of
specific dish. In this they will also determine price of making
small or huge amount and then accordingly the price of menu
will be fixed.

Cont...
 Staffing costs- This is one of the main cost which are
considered while deciding the price of menu or dish.
According to this, Pasco Cafe will determine how many staffs
are engaged in making one dish and how much time it can
take, then respectively they will set or fix dish price.

Cont...
Business environmental policies and the extent to which they impact
the costing of menus
 Current economic climate- According to this, when there is
change occur in economy it will directly impact on cafe
operation as that will increase or decrease cost of products.

Cont...
 Cost of produce- At restaurant, cafe or hotel cost of product
impact highly on menu pricing such as if the price of
vegetables increase then it will directly impact on the cost of
dish.

Cont...
The impact of seasonality restrictions on menu costs calculations
According to this factor restaurant, cafe or hotel need to offer some
dishes according to season at that time price of products may be
get increase. Similarly in case of Pasco Cafe they need to set
their seasonal menu and their price accordingly.

Costed and priced menus to meet a
range of customer requirements
Menu
Item
Total
Sold
Menu
Price
Portion
Cost
Food Cost
%
Portion
C.M.[1]
Total Food
Sales
Total
Food
Cost
Total
C.M.
C.M.
%
Ham Sandwich 12 £10.95 £2.75 25.00% £8.20 £131.40 £33.00 £98.40 24.00
%
Tuna Sandwich 8 £11.95 £4.25 36.00% £7.70 £95.60 £34.00 £61.60 15.00
%
Salad 10 £6.95 £3.75 31.00% £8.20 £69.5 £21.5 £48 20.00
%
Cheese
Sandwich
5 £10.95 £3.50 32.00% £7.45 £54.75 £17.5 £37.25 9.00%
Crisps 4 £14.95 £5.25 35.00% £9.70 £59.80 £21.00 £38.80 9.00%
Veg. Lasagne 6 £12.95 £4.00 31.00% £8.95 £77.70 £24.00 £53.70 13.00
%
Veg Burger 5 £15.95 £7.25 45.00% £8.70 £79.75 36.25 £43.50 10.00
%
Totals 50 £568.5 £151 £337.75

Cont...
Item Total
Sold
Menu
Price
Portion
Cost
Food Cost
%
Portion
C.M.
Total
Food Sales
Total
Food
Cost
Total
C.M.
C.M.
%
Cappuccino 31 £6.75 £1.93 28.59% £4.82 £59.83 £209.25 £149.42 4.63%
Cafe Latte 211 £6.75 £1.72 25.48% £5.03 £362.92 £1,424.
25
£1,061.33 31.54
%
Espresso 71 £6.95 £1.53 22.01% £5.43 £108.63 £493.45 £384.82 10.61
%
Hot Chocolate 19 £7.50 £2.23 29.73% £5.27 £42.37 £142.50 £100.13 2.84%
Tea 78 £5.95 £1.55 26.05% £4.40 £120.90 £464.10 £343.20 11.66
%
Cafe frappé 129 £6.45 £1.68 26.05% £4.77 £216.72 £832.05 £615.33 19.28
%
Cold Coffee 130 £6.95 £1.76 25.32% £5.19 £228.80 £903.50 £674.70 19.43
%
Total 669 ACM = £4.98 £1,140.70 £4,469.
10
£3,328.93 100.0
0%

Conclusion
By above mentioned point it can be summarize that while
developing a menu there are numbers of factors which are need
to be considered by a restaurant, hotel or cafe such as climate
change, staff costing, energy costing and many more. Along with
this they also need to conduct numbers of calculation related to
main components, sales mix, cost to profit margin ratio and many
more.

References
 Yazdanfar, Z. and Sharma, A., 2015. Urban drainage system
planning and design–challenges with climate change and
urbanization: a review. Water Science and Technology.
72(2). pp.165-179.
 Yigitcanlar, T. and Kamruzzaman, M., 2015. Planning,
development and management of sustainable cities: A
commentary from the guest editors.

Thank You