Food prices are easing, menu prices are not: what to do with your menu in 2026

UK shop food inflation has fallen to its lowest in almost two years, while prices in restaurants and hotels are rising at more than twice that rate. Why that gap exists, why your invoices may tell a different story, and how to reprice without guessing.

By Francesco Boffa

Co-founder

Friday, 7 August 2026 5 min read

Illustration of a wooden crate of tomatoes, peppers, lemons and greens beside a kitchen scale holding a wedge of cheese, with blank paper slips on the table

Nobody opens a restaurant because they love changing prices. We love the food, the room, the regulars who ask for the usual. But a menu is also a list of promises about money, and when the cost of the ingredients moves, either the menu moves or the margin does. Quietly, which is the worst way.

So here is where things stand, what the national numbers can and cannot tell you, and a simple method for deciding what to do about your own menu.

What the numbers say

The Office for National Statistics reports that food and non-alcoholic beverage prices rose 1.7% in the 12 months to June 2026, down from 2.2% in May and the lowest since August 2024. In the same bulletin, prices in restaurants and hotels rose 4.4%, up from 4.2%, and the ONS notes that this division’s contribution to inflation was the largest since October 2024.

The British Retail Consortium sees a similar picture from the shop shelf. Its June price monitor put food inflation at 2.4%, and for July food inflation eased to 2.2%, with fresh food rising 3.1% and ambient food only 1.1%. Fresh food is probably the part of that split a kitchen feels most.

So the two lines have crossed. Groceries are rising slowly, and eating out is getting dearer faster. Part of the explanation is that a menu price carries wages, rent, rates and energy as well as ingredients, and those do not move in step with the shop shelf.

Why your invoices may not agree

A shop price index is not a wholesale price list. The BRC’s own July monitor shows how widely individual lines can differ: UK wholesale dairy prices were lower than a year earlier for butter, cream and mild cheddar, while skim milk powder was higher. In home-grown produce, the largest annual fall it recorded for June was 57% for brown onions and the largest rise 105% for cucumbers. National averages hide movements like these.

The practical message: use the headline numbers for mood, not for decisions. Pull your last three months of supplier invoices and look at the lines that matter to your cost of sales.

There is also a warning in the BRC’s commentary. It says higher employment costs, packaging taxes, global instability and climate disruption all make it more expensive to get products onto shelves, and that if disruption in energy markets continues into the autumn, the pass-through to shop prices will come sooner and be stronger than assumed a month earlier. It is a forecast and may be wrong, but it is a reason not to treat today’s calm as a permanent state.

A method that does not need a consultant

Menu engineering has a grand name for a plain idea: look at each dish by how often it sells and how much cash it leaves behind, and decide accordingly. Access Group’s guide describes the four-quadrant matrix that most people use:

Stars sell often and leave a good margin. Protect them, and watch their ingredient cost closely, because a rise in one key ingredient can erode a star’s margin without anyone noticing.
Plough horses sell often but leave a weaker margin. Look at portion size, ingredient specification, supplier options or a small price increase. The guide notes that a small rise on a well-loved dish may be absorbed better than you expect.
Puzzles leave a good margin but sell rarely. The fix is usually visibility: placement on the menu, a better description, a word from the waiter.
Dogs sell rarely and leave little. Unless they have a reason to be there, remove them.

The key word is cash. The Restaurant CPAs make the point that contribution margin, the selling price minus the food cost, is the number to look at, not food-cost percentage alone. A dish that looks expensive to make as a percentage can still put more money in the till than a cheap one that sells for very little.

A calm way to reprice

A few habits, none of them dramatic:

Update your costs first. If your plate costings are a year old, the margins you calculate do not exist.
Rank by cash, then by effort. Start with the plough horses: a small change on a popular dish adds up faster than a big change on a rare one.
Check often. The Restaurant CPAs suggest treating the menu review as a quarterly discipline, and watching for rising food-cost percentages, falling sales of your stars, rising waste and shrinking contribution margins as early warnings.
Do not raise everything by the same percentage. It is easy, but it ignores what each dish does for you.

The Access Group guide also notes that margin erosion tends to be gradual, which is why it is easy to miss until a bad month-end shows it.

What ORDR does about this

The popularity half of the matrix is simply your sales by dish. ORDR’s reporting on sales shows what sold and when, so you can sort the menu into the four groups with your own numbers rather than a feeling. The help centre explains how reports work.