Food costing guide
How to track vendor price increases
By the EROS team · Updated
Short answer
To catch vendor price increases, compare the unit price on every invoice to the price you paid last time, flag any change over a threshold you set, and turn each increase into a yearly dollar cost and a list of the dishes it hits. Do it on every invoice, not at month-end, because a price you spot the week it changes is one you can still act on.
Why do vendor price increases go unnoticed?
Invoices arrive as paper or PDFs with dozens of lines. The total gets checked and the unit price does not. Prices also tend to creep a little at a time instead of jumping, so no single invoice looks wrong.
Take an ingredient you buy at $11.40 per pound that moves up by $0.60. That is only 5.3%, easy to wave through. At 40 pounds a week it costs you $24 a week, which is $1,248 a year, and it lands on every plate that uses the ingredient. Small enough to miss, large enough to matter.
How do you track vendor price increases?
- Pick the ingredients that matter. Start with the 20 to 30 that make up most of your spend: proteins, dairy, oil, and the produce you buy every week.
- Record the unit price from every invoice. Use the same unit every time, whether that is per pound, per case or per each, so prices can be compared.
- Compare it to the last price you paid. Flag anything that moved by more than your threshold. A percentage works, but also look at the yearly dollar cost, since a small percentage on a high-volume item can cost more than a large one on something you rarely buy.
- Turn the change into a yearly cost. Price change × weekly volume × 52.
- Find the dishes it hits and re-cost them. The ingredient matters because of what it does to plate cost and food cost percentage.
- Decide and act. See the options below.
What can you do about a vendor price increase?
- Raise the menu price on the dishes that carry the ingredient.
- Adjust the portion or the build of the dish, without shortchanging the guest.
- Switch to a different cut, grade or brand of the ingredient.
- Get a quote from a second vendor, and ask your current one about price protection or advance notice.
- Feature the dish less, or take it off the menu, if the numbers no longer work.
How often should you review vendor prices?
On every invoice, and at the very least every week. The point of tracking is speed: the sooner a rise is visible, the sooner you can reprice or renegotiate. Plate costs only stay accurate if they follow the prices you pay, as covered in how to calculate plate cost.
How does EROS track vendor price increases?
EROS reads each invoice from a photo or PDF and checks every line against what you have been paying. Anything up 5% or more is flagged with every dish it hits and what it costs you over a year, so you see the price hike and its effect on your menu together.