Most owners do not fail price increases because they “picked the wrong number.” They fail because they changed too many items at once and had no stop rule.
This playbook gives you a test structure you can run in two weeks. No spreadsheets from hell. No guesswork.
Quick Summary
- Test price changes item-by-item, not menu-wide
- Measure contribution, not just unit volume
- Protect value anchors while testing higher-elasticity zones
- Use hard stop rules before rollout
Why This Matters in 2026
As of February 13, 2026 (January CPI release):
- Food away from home: +4.0% YoY
- Limited-service meals: +4.0% YoY
NFIB’s January 2026 survey also shows a net 32% of owners planning price increases. Price changes are now normal operating work, not emergency actions.
The Core Elasticity Formula
priceElasticity = (% change in quantity sold) / (% change in price)Example:
- Price goes from $12.00 to $12.60 (+5%)
- Weekly units go from 200 to 192 (-4%)
priceElasticity = -4% / +5% = -0.8Absolute value below 1 often means demand is relatively inelastic for that item. In practice, that is usually safer territory for small increases.
Why Revenue Is Not Enough
You need contribution math:
contributionPerItem = menuPrice - variableCost
totalContribution = contributionPerItem x unitsSoldIf units drop 5% but contribution per item rises 12%, you may still win.
14-Day Test Setup
Step 1: Choose 6 items only
- 2 traffic anchors (small or no increase)
- 2 mid-demand core items
- 2 low-elasticity candidates (premium or convenience-driven)
Step 2: Set two scenarios
- Control group: current prices
- Test group: +3% to +8% depending on item role
Step 3: Hold all else constant
- Same photos
- Same bundles
- Same promo calendar
If you change everything together, you cannot learn anything useful.
Daily Scorecard (5 numbers)
- Units sold by test item
- Item contribution dollars
- Average check
- Refund/complaint count
- Repeat guest signal (if available)
This is enough for a clean decision.
Stop Rules Before You Start
- Stop if item contribution drops for 3 straight days
- Stop if complaint/refund rate spikes above baseline threshold
- Stop if anchor-item units fall beyond preset limit
Decide these rules upfront. Stress makes bad decisions expensive.
Worked Mini Example
Item: house chicken bowl
- Old price: $13.50
- New price: $14.10 (+4.4%)
- Variable cost: $6.20
- Units/week before: 260
- Units/week after: 248 (-4.6%)
Old contribution = (13.50 - 6.20) x 260 = $1,898
New contribution = (14.10 - 6.20) x 248 = $1,959
Delta = +$61/weekUnits fell, but contribution improved. That is why volume-only thinking misleads owners.
Common Mistakes
- Raising every item equally
- Measuring sales dollars only
- Ignoring channel mix (dine-in vs delivery)
- No stop rule during negative feedback
A small, measured increase beats a dramatic rollback.
Related Guides
- US Menu Price Increase Notice Template (2026)
- Menu Price Review Checklist
- Break-Even Sales Calculator
- Prime Cost Guide
- US Delivery App Pricing Guide
KitchenCost helps you test price scenarios against item-level costs before you push updates live.
Try KitchenCost.