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- Good for
- Running the business
We can raise the bill and still finish December with less money. The useful question is how much contribution we keep across the whole service, alongside whether guests return.
CGA by NIQ research for NTIA, published on 28 October 2026, puts average reported spend per head at £28.06. Growth from 2025 to 2026 was 2.1%. London was effectively flat, moving from £30.09 to £30.08. These are self-reported, nominal figures, not inflation-adjusted spending or till records. We should read them as a warning about affordability, not a price ceiling for every menu. See the research coverage and second report.
Give the average some company
We start with comparable services: similar booking patterns, opening hours and party sizes. We count covers consistently and divide food and drink sales by those covers. We keep tips and service charges outside that sales measure. Then we separate the guest-facing bill from net sales used for margin calculations.
We record starter, side, dessert and alcohol-free drink attach rates, meaning the share of covers buying each extra. We also track premium choices, set-menu take-up, cancellations and feedback about value. A bigger average can hide fewer guests, or a shift towards larger parties that would have spent more anyway.
Our starting question is where we can offer something guests actively want. A useful side suggestion, a clearly priced premium main or a dependable set menu can improve the occasion. Repeated pressure to spend more can spoil it.
Work one service three ways
Everything in this example is illustrative, including demand responses. It is not a forecast drawn from the research. We assume all sales attract 20% VAT, so gross receipts divided by 1.20 give net sales. Product costs exclude recoverable VAT. Contribution means net sales less product costs, before labour and overheads. We hold staffing and overheads unchanged across these scenarios.
Our baseline is 100 covers spending £30 each, with £8 product cost per cover:
- Gross receipts: 100 × £30 = £3,000.
- Net sales: £3,000 ÷ 1.20 = £2,500.
- Product cost: 100 × £8 = £800.
- Contribution: £2,500 minus £800 = £1,700.
- Contribution margin: £1,700 ÷ £2,500 × 100 = 68%.
For a blanket 5% price rise, we assume the same basket but 8% fewer covers:
- Average bill: £30 × 1.05 = £31.50.
- Covers: 100 × 0.92 = 92.
- Gross receipts: 92 × £31.50 = £2,898.
- Net sales: £2,898 ÷ 1.20 = £2,415.
- Product cost: 92 × £8 = £736.
- Contribution: £2,415 minus £736 = £1,679.
- Contribution margin: £1,679 ÷ £2,415 × 100 = 69.52%, rounded.
- Contribution change: £1,679 minus £1,700 = a £21 reduction.
The percentage margin improves while the pounds available to pay the team fall. We need both measures on the sheet.
Build a mix option guests can recognise
For our alternative, we hold 100 covers and the core entry price. These are additional illustrative changes to the baseline basket, with each sale counted only once:
| Change | Extra gross sales | Extra product cost |
|---|---|---|
| Side attach rate moves from 20% to 30% | 100 × (30% minus 20%) = 10 extra sides; 10 × £4.80 = £48 | 10 × £1.20 = £12 |
| Ten guests choose a premium main | 10 × £3.60 supplement = £36 | 10 × £1.50 extra cost = £15 |
| Twenty purchases on a tested, less price-sensitive line rise by £0.60 | 20 × £0.60 = £12 | £0, unchanged recipe and volume |
We then rebuild the service:
- Extra gross sales: £48 + £36 + £12 = £96.
- Gross receipts: £3,000 + £96 = £3,096.
- Average spend: £3,096 ÷ 100 = £30.96.
- Net sales: £3,096 ÷ 1.20 = £2,580.
- Product cost: £800 + £12 + £15 = £827.
- Contribution: £2,580 minus £827 = £1,753.
- Contribution margin: £1,753 ÷ £2,580 × 100 = 67.95%, rounded.
- Gain against baseline: £1,753 minus £1,700 = £53. Gain against the blanket scenario: £1,753 minus £1,679 = £74.
This option has a slightly lower percentage margin than baseline but more contribution pounds. Keeping covers is an assumption to test, not a promise. Extra preparation or service time would need costing before we chose it.
Make the December offer easy to buy
We can also cost a set menu around a clear total and manageable choices. We check whether it adds purchases or simply discounts courses guests already buy. We keep supplements visible and avoid putting a compulsory extra behind an attractive headline price. We have not included a set-menu gain in the example because we have not measured one.
For targeted price moves, we use our own purchasing patterns and a small trial to identify less sensitive lines. Low sales alone do not prove low sensitivity. We keep an accessible choice in each section and compare contribution, covers and feedback over equivalent services before extending the change.
Budget 2026, paragraph 6.227, announces an RPI alcohol duty rise from 1 February 2027. HMRC's new duty rates are not yet published. We leave that future cost as pending, request confirmed supplier prices when available and avoid presenting an invented per-drink increase as a December necessity.
