In UK hospitality, prices shown to guests are VAT-inclusive. Your cost decisions should still start from net sales and real contribution per item.
This checklist is built for operators who want a repeatable monthly routine instead of reactive price changes.
Quick Summary
- Use CPIH restaurants and hotels as your operating inflation signal.
- Do cost math on net prices, then convert to VAT-inclusive menu prices.
- Reprice items that miss contribution floors, not the whole menu by default.
- Split dine-in and delivery reviews before deciding final price moves.
Why monthly reviews matter now
ONS released the December 2025 CPI bulletin on 15 January 2026.
In that release, CPIH all items was 3.6% and CPIH restaurants and hotels was 3.8% year-on-year.
When your operating category runs hotter than headline inflation, annual price resets usually arrive too late.
VAT-first pricing math
Most UK restaurant pricing decisions become clearer with one sequence:
netPrice = grossPrice / 1.20
requiredNetPrice = dishCost / targetFoodCostRatio
requiredGrossPrice = requiredNetPrice x 1.20Round at the end, after VAT conversion.
Worked Example (GBP)
Assumptions:
- Current gross menu price:
GBP 15.60 - Dish cost (food + direct packaging):
GBP 4.20 - Target food-cost ratio:
30%
Step 1: convert current gross to net.
current net = 15.60 / 1.20 = GBP 13.00Step 2: calculate required net price.
required net = 4.20 / 0.30 = GBP 14.00Step 3: convert required net back to gross.
required gross = 14.00 x 1.20 = GBP 16.80Operationally, many teams test GBP 16.75 or GBP 16.95 first, then review mix and volume for 14 days.
Local Execution: Central London vs Leeds Suburban
| Context | Typical pressure | Practical move |
|---|---|---|
| Central London business district | Higher labour density and peak-hour throughput pressure | Use tighter lunch pricing checks and protect top five high-volume dishes first |
| Leeds suburban neighbourhood mix | Stronger evening and family value sensitivity | Prioritise bundle architecture and phased increases on premium add-ons |
One national inflation headline does not mean one pricing move for every location.
30-Minute Monthly Review Loop
- Pull the last 30 days of sales and contribution by top 10 items.
- Refresh supplier costs for your top volatility inputs.
- Recalculate item contribution using net (ex-VAT) revenue.
- Flag items with contribution drift and choose targeted actions.
- Check delivery contribution separately before final rollout.
Weekly 10-Minute Spot Check
- Monitor one to two high-volume proteins.
- Monitor dairy, oils, and key produce lines.
- Trigger immediate recalculation when a core input moves materially.
Related Guides
- UK Restaurant Menu Pricing Guide
- UK Menu Pricing Calculator
- UK Menu Price Rounding Guide
- UK Restaurant VAT Pricing Guide
- UK Restaurant Labour Cost Calculator
- UK Restaurant Prime Cost Calculator
KitchenCost helps operators keep VAT handling, recipe cost, and monthly reprice decisions in one workflow.