Restaurant price markups: the highest vs. lowest

Categories: Foodie News

Heartland Strip Steak LEON
Michelle Leon
Steaks, like this one from Heartland, are spendy but tend to have low mark ups.
The San Francisco Chronicle looked into restaurant food pricing to compare the cost of ingredients to the final cost of the dish. These costs, of course, don't take into account the expense of, say, purchasing and cleaning stemware, paying for a liquor license, or the varying amounts of labor involved in preparing or serving a beverage or dish, but the base data is still interesting ... and some of it may surprise you.

Click here to learn more about some of the most and least marked-up restaurant items:

Foods and beverages with the largest profit margins:


* Soda from the fountain sells for 20 times the restaurant's cost, and eight times more when it's served in a can.
* A cup of tea in a nice sit-down restaurant goes for $2.25 to $3.25, whereas the tea bag costs no more than 35 cents, said Frank Klein, a national restaurant consultant in Palo Alto.
* Wine by the glass at a 300- to 400-percent markup is even more profitable than wine by the bottle. Beer costs are roughly 25 cents on the dollar.
* Most restaurants sell their pasta dishes for six to 10 times more than cost.
* When it comes to protein, eggs have the biggest markup. Mali said the profit margin for a scramble is about 80 percent.
* Pizza is also a sure bet, Klein said. The large cheese pie that sells for $16 to $20 probably only cost $2.50 in ingredients.
* And those mixed green salads diners order for $8 to $10 cost the restaurant no more than $1.60.

Foods and beverages with the smallest profit margins:

* "That big rib-eye steak is a loss leader," said Chad Newton, culinary director for Klein's FK Restaurants and Hospitality, a national food service group. "You have to put it on the menu. But you can't charge the $40 at which you should price it."
* Newton said Dungeness crab is another one of those items likely to be a dining bargain.
"It's always expensive" wholesale, he said. "But in San Francisco you have to have it on the menu during crab season, even if you just break even."


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