Restaurant Menu Pricing for Delivery

Before you can price your delivery menu, you need to understand exactly what each delivery order costs you beyond the food itself. Most restaurant owners underestimate these costs because they are spread across many small line items. Added together, they are significant.

Packaging costs: £0.50-£2.00 per order. This varies enormously depending on your cuisine and your standards. A simple burger and chips might need a clamshell box, a chip scoop, and a paper bag — about 60p total. An Indian restaurant sending out three curries with rice, naan, and chutneys in leak-proof containers with a branded carrier bag could easily spend £1.80-£2.00 per order. Buy in bulk to reduce costs, but do not skimp — a leaking container costs you a refund and a lost customer.

Delivery cost: £0-£6 per order. If customers collect, this is zero. If you use your own drivers, factor in wages, fuel, insurance, and vehicle costs — typically £3-£5 per delivery depending on distance. Third-party courier services like Stuart charge £3-£6 per delivery. Aggregator delivery is "free" to you in theory, but it is baked into their 25-35% commission.

Payment processing: 1.5-2.5% per transaction. Every card payment incurs a processing fee. On a £25 order, that is 38p-63p. It is small per order but adds up — at 500 orders per month, you are paying £190-£315 in processing fees.

Platform commission (if applicable): 15-35%. On aggregator platforms, this is the biggest single cost. A £25 order at 30% commission costs you £7.50 — more than your food cost on many items. On your own direct ordering platform, this drops to zero (you only pay the payment processing fee).

Here is what this looks like on a typical £25 order:

• Via aggregator — food cost £7.50 (30%) + packaging £1.20 + commission £7.50 (30%) + payment processing £0 (aggregator handles) = £16.20 in costs. You keep £8.80, or 35% of the order value.
• Via direct ordering (own driver) — food cost £7.50 + packaging £1.20 + delivery £4.00 + payment processing £0.50 = £13.20 in costs. You keep £11.80, or 47% of the order value.
• Via direct ordering (collection) — food cost £7.50 + packaging £0.80 + payment processing £0.50 = £8.80 in costs. You keep £16.20, or 65% of the order value.

The channel you sell through has a bigger impact on your margin than almost any menu pricing decision. This is why direct ordering matters so much.

There is no single right answer for how to price your delivery menu. The best approach depends on your cuisine, your local market, and whether you are on aggregators, direct ordering, or both. Here are the three main strategies, with the trade-offs of each.

Strategy 1: Same prices as dine-in (absorb the costs). This is simple and avoids customer confusion, especially if regulars see your menu in-restaurant and online. The downside is that your delivery margins will be significantly lower than dine-in — potentially 15-20% lower once you account for packaging and delivery costs. This only works if your dine-in margins are healthy enough to absorb the hit, or if your volume is high enough that the reduced margin per order is offset by the extra revenue.

Strategy 2: Modest markup of 10-15%. This is the most common approach and the one most customers accept without question. A dish that is £12 in-restaurant becomes £13.50 online. Most customers expect delivery food to cost slightly more, just as they expect a pint at a pub to cost more than a can from the supermarket. The key is consistency — mark up everything by the same percentage so nothing feels arbitrarily expensive.

Strategy 3: Delivery-specific menu with built-in margins. Instead of marking up your existing menu, create a separate delivery menu with items designed for higher margins. Meal deals, combo boxes, and family bundles naturally have higher perceived value and allow you to build in packaging and delivery costs. A "Chicken Box — 2 pieces, chips, slaw, and a drink for £10.99" is not compared directly to any dine-in price, so the margin conversation is simpler.

• If you use aggregators and direct ordering — price aggregator menus 10-15% higher than your direct ordering menu. This accounts for commission and gives customers a clear financial incentive to order direct.
• Round your prices psychologically — £11.95 feels significantly cheaper than £12.00 to customers, even though it is a 5p difference. Use .95 or .99 endings on your higher-priced items.
• Boost margins with extras and sides — sides, drinks, and desserts typically have 70-80% margins. A £2.50 portion of chips costs 40-50p to make and package. Encourage add-ons by positioning them prominently and keeping prices accessible.

Pricing strategy only works if you also get the levers around it right — minimum order values, delivery charges, and free delivery thresholds. These tools help ensure every delivery order is profitable, not just high-value ones.

Minimum order values. If your delivery costs you £4-£5 per order (driver, packaging, processing), a £6 order is a guaranteed loss. Set a minimum order value that ensures every delivery covers its costs. For most restaurants, £12-£15 is the sweet spot — low enough that a single person can comfortably order, high enough that you are not losing money. If you are using your own drivers, your minimum can be slightly lower because your per-delivery cost is more predictable.

Delivery charges. There are two common models. A flat fee (e.g. £2.50 for all deliveries) is simple and easy for customers to understand. Distance-based fees (e.g. £1.50 within 1 mile, £2.50 within 2 miles, £3.50 within 3 miles) are fairer but more complex. Most restaurants opt for flat fees for simplicity. A reasonable delivery charge actually increases trust — customers are wary of "free delivery" because they suspect the cost is hidden in the food prices.

Free delivery thresholds. "Free delivery on orders over £25" is one of the most effective tools for increasing average order value. Customers who would have ordered £18 worth of food will add a side and a drink to hit the threshold. Set the threshold just above your current average order value — if your average is £22, set free delivery at £25. This nudge consistently increases average order value by 15-25%.

• Calculate your break-even per delivery — add up all costs for a typical order (food, packaging, delivery, processing). Subtract this from the order value. If the result is positive, you are profitable on that order. If not, you need to adjust your pricing, your minimum order, or your delivery charge.
• Worked example — average order £22. Food cost £6.60 (30%). Packaging £1.20. Own driver £4.00. Processing £0.44 (2%). Total cost: £12.24. Profit per order: £9.76. To break even on monthly fixed costs (tech, marketing) of £200, you need about 21 delivery orders per month — roughly one per day.
• Review pricing monthly — food costs change with suppliers, seasons, and inflation. Packaging costs creep up. Set a reminder to review your delivery menu pricing every month and adjust as needed. Even small changes (50p on a main course) compound across hundreds of orders.