Catering Pricing Strategies: Building Value in Every Bite

For those who love to cook and serve food, the catering industry can be an appetising space in which to ply your trade. In 2023, IBIS valued the UK catering sector at £1.5 bn with a growth rate of 4% for that year, with a rise of 3.6% predicted through 2024. However, given the volatile nature of the economy in recent years, it behoves caterers to stop and think about how they price their offerings. As with many businesses, there is a fine balance to be sought between being competitive and being profitable.

If you are new to the sector, catering pricing can be a real head-scratcher. Even if you’re an industry veteran it can’t hurt to take another look at your pricing model. Here we look at everything you need to know to price your offering effectively.

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Understanding catering costs

The first step in catering pricing, as with any business, is to accurately and comprehensively account for all business costs. Some of these will be fixed and remain the same from one month to the next, while others will be variable and depend on the demands of any given period or job.

Let’s look at some of the categories you’ll need to consider when accounting for your costs:

Operational overheads

Your overhead costs are those associated with cooking, transporting and serving food to the client. They will usually include:

  • Kitchen rent
  • Energy and utility costs
  • Administrative costs (e.g. outsourced payroll, accounting, bookkeeping etc.)
  • Marketing costs
  • Transport costs
  • Cookware and other equipment
  • Insurance (public liability, vehicle etc.)
  • Ingredients, food and drinks

Equipment and tableware

The best catering providers offer a bespoke service that takes care of every aspect of cooking, transporting and serving food. Therefore, you may wish to cover additional equipment costs, including:

  • Glassware (wine glasses, champagne flutes etc.)
  • Serving trays
  • Silverware
  • Grills, barbecues or other on-site cooking equipment
  • Uniforms and aprons for staff


The third and arguably most important cost component is staffing. Even the most delectable dishes can be soured by a bad experience with staff. So make sure you factor in staffing costs to ensure that you can hire the right people and ensure that they are properly remunerated for their efforts. Using the right team management software can help you keep track of your labour spending, while also scheduling teams effectively to rotate star performers and reduce the risk of burnout for your hardest workers.

Factors to consider when deciding catering pricing

Now that you have a clear idea of your costs, it’s time to consider some of the other factors that will determine your price point. These include:

Ideal profit margin

Identify a profit margin that will cover your costs, ensure that you can pay your staff a competitive wage and invest in the business. When you have established this figure, work backwards from there.

Competitor pricing

Take a look at other caterers that service the same target market. Take a look at their pricing and see if you can match it. Avoid undercutting them on pricing. Instead, try to think of other ways to add value than being the cheapest game in town, as this can stymie future margins.

The demands of each event

Corporate events, weddings, birthdays and funerals will all have different implications for costs, staffing and logistics. Identifying the demands of each event or choosing a specialism can ensure that your catering pricing is competitive yet profitable.

Pricing methods for catering

With all the factors behind your pricing considered, the next step is to choose from these catering pricing strategies:

Fixed menu pricing

Fixed menu pricing offers the same fixed-price menu items regardless of the nature of the event or the size of the party. This keeps operational costs predictable and ensures no unpleasant surprises for the client.


Tiered pricing strategies allow clients to choose between a range of offerings, from simple finger food to an opulent drinking and dining experience. This allows caterers to attract clients with a wide range of needs and budgets.

Per-person pricing

Caterers offer a fixed menu at a set price per head.

À la carte

Clients can create their own provisions from a range of drinks and menu selections and tailor their packages more precisely to their needs.

Communicating and adjusting prices

However you decide to price your offering, it is essential that your prices be as simple and transparent as possible for clients. Invoices should be clearly set out and itemised, with payment terms clearly established to ensure healthy cash flow.

If you need to adjust your pricing in line with inflation or increased supply chain costs, it’s important to communicate this as early as possible. 30 days’ notice is usually sufficient.

Simplify payments with Square

Whatever catering pricing options you choose, the team at Square are on hand to make sure managing payments is as simple, transparent and convenient as possible for you and your clients. Catering operations are easy to set up using Square for Restaurants, while invoices can be generated quickly and easily with a selection of templates and automated reminders.

As well as helping you access funds faster, Square’s competitive and transparent pricing means you’ll always find it easy to account for your costs and manage cash flow.

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