How to Calculate Gross Profit Per Dish: UK Restaurant Guide

Key takeaways

1. Clear gross profit per dish calculations help UK restaurants, pubs, and hotels understand which menu items support their overall profitability.
2. Accurate ingredient lists, unit costs, and wastage assumptions form the foundation of reliable dish-level costing.
3. Menu prices that reflect both ingredient costs and target gross profit margins support sustainable, competitive pricing.
4. Regular reviews that factor in changing supplier prices, labour, delivery commissions, and waste protect margins over time.
5. Jelly automates invoice scanning, live gross profit tracking, and price alerts so teams can manage margins with less manual work. Book a chat with Jelly to see it in action.

Understanding Gross Profit Per Dish: Why It Matters For Your Menu

Defining key terms for dish profitability

Gross profit is the money left after subtracting Cost of Goods Sold (COGS) from revenue. For individual dishes, gross profit per dish uses the formula (dish price − dish cost) / dish price. Net profit then subtracts all operating expenses, including labour, rent, and utilities.

Variable costs, such as ingredients, rise and fall with sales volumes. Fixed costs, such as rent, stay the same regardless of covers. Clear separation of these costs supports accurate pricing and menu decisions.

The impact of accurate dish costing

Precise dish profitability data supports menu engineering, supplier negotiations, and pricing decisions. An ideal food cost percentage for many UK venues sits around 25-35%, so ingredients should not exceed roughly a third of the selling price.

Without reliable costing, operators struggle to see which dishes add profit and which quietly dilute margins.

Step 1: Document Recipe Ingredients and Quantities

Capture every component

Select a dish and build a full ingredient list. Record all components, including spices, oils, garnishes, and small items such as salt or herbs. Many operators underestimate costs when these items are missing.

Standardise measurements

Measure each ingredient per portion using consistent units. Standard recipes support stable margins, because portion variation quickly erodes profit. For example, record 150 g chicken breast, 50 ml cream, 5 g herbs, rather than loose estimates.

Common errors include missed garnishes, guessed portion sizes, and mixed units across recipes.

Step 2: Calculate the Unit Cost for Each Ingredient

Use current pricing data

Collect recent supplier invoices for every ingredient. Identify the price per unit, such as per kilogram, litre, or pack. Use the most recent prices, because ingredient costs move with market and supplier changes.

Convert units accurately

Align supplier units with recipe units. If flour is bought by the kilogram but the recipe uses 50 grams, calculate a cost per gram, then multiply by 50. A single dish with many ingredients, suppliers, and pack sizes can create a high risk of error.

This is where Jelly simplifies the process. Jelly uses automated invoice scanning to capture quantity, SKU, price, and tax from every line item. The platform then performs unit conversions in the background, which reduces human error in complex manual calculations and cuts admin time.

Step 3: Determine the Total Raw Material Cost Per Dish

Add ingredient costs per portion

Multiply each ingredient’s unit cost by the quantity in the portion, then add the results. For example, chicken at £2.40, vegetables at £0.85, and sauce ingredients at £0.45 give a total raw cost of £3.70 per portion.

Include realistic wastage

Add a practical wastage allowance, often around 2-5% depending on ingredient type and kitchen discipline. Fresh produce usually carries higher waste than dry goods, so a single blanket percentage may not be realistic.

Jelly’s “Cookbook” feature lets chefs build dishes from ingredients already loaded from scanned invoices. The system handles conversions and calculations, which cuts typical costing time per menu item from 28 minutes to about 3 minutes.

Step 4: Set and Review Your Dish Selling Price

Link price to margin and market

Your selling price needs to reflect your concept, local competition, and target margin. Effective menu pricing balances guest expectations, ingredient costs, and required profit so the dish feels fair to guests and viable for the business.

Understand pricing impact on gross profit

Small price changes can have a large effect at volume. A £1 increase on a dish that sells 100 portions a week equates to about £5,200 extra revenue per year, if volumes hold. Prices still need to keep food cost percentages within the 25-35% range to support long-term profitability.

Step 5: Calculate Gross Profit Per Dish

Apply the core formula

Use this formula for each dish: Gross Profit Per Dish = (Dish Selling Price − Total Raw Material Cost) / Dish Selling Price.

Example: A dish that sells for £12 and costs £3.70 in ingredients has a gross profit of (£12 − £3.70) / £12 = 0.692, or 69.2%.

Interpret your gross profit percentage

This margin shows the share of revenue left after ingredient costs. With a target food cost of 25-35%, gross profit on many dishes should usually sit between 65% and 75%. A margin around 69% is often considered healthy for many UK concepts.

Jelly tracks Gross Profit (GP) margins live as invoices update ingredient prices. Dish costs and GP adjust automatically, with clear colour coding when margins fall or improve. Schedule a chat to see live margin tracking on real dishes.

Step 6: Monitor and Optimise Dish Profitability Over Time

Review margins regularly

A one-off costing exercise does not protect margins. Ingredient prices change with seasons, supply issues, and market shifts. Regular checks help you adjust prices, recipes, or suppliers before profit drops become significant.

Use data to guide decisions

Operators can use dish-level profitability to negotiate with suppliers, focus marketing on high-margin items, and reduce focus on underperforming dishes. When gross profit data connects to your POS, reports by day, week, or month become available for clearer menu analysis.

Jelly’s Price Alert feature flags every ingredient price change so chefs can query increases, negotiate, or request credit notes. Customers commonly report gross margin improvements of around 2 percentage points within the first three months.

Beyond Raw Materials: Factor in Labour and Delivery

Include labour where needed

Some operators extend costing beyond ingredients to include labour per dish. One simple approach uses this method: (Chef’s hourly wage × minutes spent on the dish) / 60. For example, a chef on £15 per hour spending 10 minutes on a dish adds about £2.50 in labour cost per portion.

Adjust for delivery and inventory efficiency

Delivery platforms often charge commissions that can reach 30%, which has a major effect on dish-level profit. Menus for delivery may need separate prices or recipes to stay viable. Consistent COGS tracking also highlights waste and stock inefficiencies, which supports better ordering and inventory control.

Why Jelly Supports UK Restaurant Profitability

Jelly vs manual spreadsheets vs complex competitors

Key benefits of adopting Jelly for your kitchen

Jelly’s automated invoice scanning removes most manual entry and keeps ingredient prices up to date. Live dish costing updates GP as supplier prices shift, and Price Alerts highlight changes that warrant follow-up. POS integration provides routine gross profit reports, so you can see which dishes contribute most to the bottom line.

These tools reduce time spent on spreadsheets and save around 28 minutes per menu item costing, which frees teams to focus on guests and growth.

“Price hikes were squeezing our margins and we had limited visibility. With Jelly, every dish cost is up to date on one screen. We cut food costs by 5% in a month.” – Stuart Noble, Head Chef, Cairn Lodge Hotel

Conclusion: Gain Control of Your Menu’s Profitability

Accurate, up-to-date gross profit per dish gives UK hospitality operators clear control over menu performance. Manual spreadsheets can work at small scale, but they become slow and error-prone as menus and sites grow.

Jelly offers an automated way to track ingredient prices, dish costs, and margins in real time. Book a chat today to see how Jelly can support more confident pricing, tighter cost control, and healthier margins.

Frequently Asked Questions

What is a good gross profit margin for a restaurant dish in the UK?

Many UK venues target a food cost percentage between 25% and 35%, which means gross profit margins of roughly 65-75% on individual dishes. This range usually supports both competitive pricing for guests and sustainable profitability for the business.

How is gross profit different from net profit in a restaurant?

Gross profit is revenue minus Cost of Goods Sold, which mainly covers ingredient costs. Net profit then subtracts all operating expenses, including labour, rent, utilities, marketing, and other overheads. Gross profit per dish shows which items generate contribution before overheads, while net profit reveals the overall financial health of the restaurant.

How often should I recalculate dish profitability?

Manual processes often limit reviews to weekly or monthly cycles, which can leave margin issues undiscovered for weeks. Ingredient prices can move daily through supplier changes, seasonal availability, and inflation. Real-time systems such as Jelly update costs as new invoices arrive, so operators can act quickly when margins fall outside target ranges.

What is the most common mistake when calculating dish costs?

Many teams miss smaller ingredients such as spices, oils, and garnishes, or mis-handle unit conversions between supplier packs and recipe quantities. These small discrepancies build over time and across the menu. Another common issue is ignoring realistic wastage, which leads to costs that look better on paper than in the kitchen.