How to cost a menu in the UK (without a spreadsheet meltdown)

Most menu costing advice online is written for hotel kitchens with a head chef, a sous chef, and a costing template nobody outside catering college has ever opened. If you're a market trader, a small caterer, or a bakery with a standing product list, you don't need hotel-brigade theory. You need a sequence you can actually get through on a Sunday evening.

What menu costing means for a small food business

For a business your size, menu costing means making sure every item you sell has been costed the same way, so when you look across the whole list, you can actually tell which items are earning their keep and which are costing you money every time someone orders them.

List every sellable item before you open a spreadsheet

Before any costing happens, write down every single thing you sell, as its own line. Not "cakes," but every cake variant. Not "sandwiches," every filling. It's tedious and it's also the step that actually reveals the size of the job, and where the gaps are: most small menus have more items on them than the owner would guess off the top of their head, plus a few that technically still exist on a price list somewhere but haven't been made in months.

This is also a good moment to be honest about anything that should probably come off the list entirely, rather than costing something you don't really want to keep selling.

Cost each recipe the same way, no exceptions

Once you have the full list, cost every item using the same method: real ingredient costs from pack prices, real quantities, real yield. If you've already read our general recipe costing guide, this is that method applied item by item down the whole list, not a different process for menu-level work.

The no-exceptions part matters more than it sounds like it should. It's tempting to properly cost your best-sellers and rough-guess the items you sell less often, but the items you rough-guess are exactly the ones most likely to be losing money, precisely because nobody's looked closely enough to notice.

Spot the loss-makers

With every item costed properly, look at the list as a whole and cross two things: how much you sell of each item, and how thin the margin is on each one. An item you sell rarely with a thin margin is a minor issue. An item you sell constantly with a thin (or negative) margin is actively working against you, every single time someone orders it.

This is usually the single most useful five minutes in the whole exercise, because it's the moment a menu that feels like it's doing fine turns out to have one or two items dragging the average down, hidden by everything else on the list performing normally.

Tiered prices: retail, wholesale, catering

If you sell the same items across different customer types, direct retail, wholesale to another business, or catering orders, the underlying recipe cost is the same, but the price shouldn't be. Wholesale buyers are usually taking volume and reselling with their own margin on top; catering often carries extra logistics and a different expectation around service.

Build your pricing so each recipe has its base cost once, with a tier structure on top for each customer type, rather than maintaining three separate price lists by hand that all need updating independently every time an ingredient cost changes. We've covered this specific decision in more depth in retail, wholesale and catering pricing.

UK practicalities: VAT mindset and allergens as a process

Two UK-specific points, briefly.

VAT: whether your prices are VAT-inclusive and whether you're registered changes how you should be reading your margin numbers, and it's worth a proper conversation with an accountant rather than a rule of thumb from a blog post, because your specific situation (turnover, product mix, hot vs cold food rules) affects the answer.

Allergens: under Natasha's Law, PPDS (prepacked for direct sale) items need full ingredient labelling, and every item on your menu needs its allergens tracked accurately regardless of whether it's PPDS. That's a compliance process sitting alongside your costing process, not a costing question itself, so we're not covering it in depth here. If it's not already a solid process for you, that's worth sorting as its own project.

A lightweight weekly review when prices move

Menu costing isn't a once-a-year exercise if you want it to stay honest. The lightweight version: whenever you notice a supplier price change, glance at which menu items use that ingredient and whether it's shifted their margin meaningfully. We've written the fuller version of this habit in updating recipe costs when ingredient prices rise.

You don't need a full menu re-cost every week. Catch drift early, a handful of minutes at a time, instead of discovering six months of small increases all at once during a bad quarter.

Tools: spreadsheet vs software

A spreadsheet can absolutely do menu costing, plenty of small food businesses run on one successfully for years. Where it tends to break down is exactly the point above: keeping every item's cost current as ingredient prices move, across a full menu, without a linked structure that updates automatically. We've written a fuller, more even-handed comparison in recipe costing spreadsheet vs software if you're weighing that decision specifically.

To cost one menu item properly right now, our recipe cost calculator is free. If you're working through a full menu and want tiered retail, wholesale and catering pricing that stays accurate as costs move, that's what the 14-day free trial is built for, no card needed.

Cost every recipe. Plan the week. Miss nothing.