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Restaurant

Menu Price Increase Planner

Enter your current monthly revenue, average spend per customer, the price increase percentage you are planning, and your estimate of how many customers might be lost. The calculator shows you the new projected revenue, the revenue impact of customer loss, and whether the increase nets you more or less than today.

Enter your current revenue, average spend, price increase, and expected customer loss to plan your price change.
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Revenue projections are estimates based on the assumptions you enter. Customer behaviour after a price increase is inherently uncertain. This calculator is a planning tool, not a guarantee of outcome.

How to use this tool

  1. 1Enter your current monthly revenue - use a recent representative month, not a seasonal peak.
  2. 2Enter your current average spend per customer or per cover - divide total revenue by number of covers.
  3. 3Enter the price increase you are planning as a percentage - for example, 8 for an 8% increase.
  4. 4Enter your estimate of how many customers you might lose as a percentage - this is the uncertain variable. Try 0%, 5%, and 10% to see a range.
  5. 5Compare the results. A small price increase often more than compensates for a modest drop in customer numbers.

Formula used

New revenue per customer = current average spend x (1 + price increase %). New customer count = current customers x (1 - customer loss %). New revenue = new revenue per customer x new customer count. Revenue change = new revenue - current revenue.

Example

Revenue 40,000, avg spend 28, price increase 10%, customer loss 5%

Current customers: 40,000 / 28 = 1,429. New spend per customer: 30.80. New customer count after 5% loss: 1,357. New revenue: 41,797. Despite losing 5% of customers, revenue increases by 1,797 because the higher price more than compensates. Net revenue gain: +4.5%.

Revenue 25,000, avg spend 20, price increase 15%, customer loss 12%

Current customers: 1,250. New spend: 23. New count: 1,100. New revenue: 25,300. Revenue barely changes (+1.2%) despite a 15% price increase, because a 12% customer loss almost wipes out the gain. The operator should model a more modest 8% increase with the same customer loss assumption.

Common use cases

  • Deciding whether to absorb a supplier cost increase or pass it to customers through a price rise
  • Planning a menu relaunch or seasonal price adjustment with confidence about the revenue impact
  • Stress-testing a proposed price increase against pessimistic assumptions about customer response
  • Presenting a business case for a price increase to business partners or investors
  • Modelling the break-even customer retention rate for different price increase levels

Common mistakes

  • Assuming zero customer loss when raising prices - even loyal customers notice and some reduce frequency or portion size.
  • Raising prices across the whole menu simultaneously - a phased approach or selective repricing of high-traffic items is less disruptive.
  • Not monitoring actual customer counts after a price change - track covers weekly to compare actual to your estimate.
  • Ignoring the mix effect - if your highest-margin items are the most price-sensitive, a blanket increase may hurt profit even if total revenue holds.

Frequently asked questions

How much customer loss should I expect from a price increase?

Research and industry experience suggest restaurants typically lose 0-8% of customers for a 10% price increase, depending on concept, competition, and loyalty. Fine dining and destination restaurants lose fewer customers (price-inelastic demand). Fast casual and price-sensitive segments lose more. Test with smaller items first and watch cover counts closely.

Is it better to raise prices on specific items or across the board?

Strategic selective repricing is usually better. Raise prices on high-traffic, lower-sensitivity items (popular mains, drinks, desserts) while holding prices on value anchors. This generates revenue without the perception of an across-the-board increase. Complete menu reprints also allow a fresh look that can justify increases more naturally.

How do I know if my price increase worked?

Compare revenue per customer and total revenue month-on-month after the increase, controlling for seasonality. A successful increase shows higher revenue per cover with acceptable cover count decline. Also track guest feedback and repeat visit rates in the weeks following the change.

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