How to price pizza: markup, GP and raising prices in the UK
Net price = food cost (ex VAT) × 3.3 to 5, which gives a 20–30% food cost and a 70–80% GP. Then check each pizza leaves at least £7–9 of cash margin, compare with three local pizzerias, round, and add 20% VAT: hot takeaway pizza is always standard-rated in the UK. Raise prices a little every year (3–5%) rather than by £1 every few years.
The three ways to price a pizza
Every pizza operator ends up arguing the same points: price from cost or from the competition? One markup across the menu, or each pizza on its own merits? There are three methods and none works alone.
- Cost-plus markup: food cost × a multiplier. Quick, but it knows nothing about what your customers will pay.
- Target cash margin: every pizza has to leave a minimum number of pounds towards rent, energy and wages.
- Market price: what the pizzerias and takeaways around you charge for a comparable pizza.
Our view: use all three, in that order. The markup sets the floor, the cash margin decides between pizzas, the market sets the ceiling. If your cost forces you above the market, the problem is the recipe or the supplier, not the price.
This page assumes you already know your food cost per pizza. If you don’t, start with the costing sheet.
Pizza costing sheet: food cost, portions and selling price
Markup or cash margin?
The markup: ×4 to ×5 in practice
Most independent pizzerias multiply their ex-VAT food cost by 4 to 5. ×4 is a 25% food cost (75% GP), ×5 is 20% (80% GP). Below ×3.3 your food cost goes over 30% and the GP drops under 70%, which most UK operators treat as the floor for pizza. Remember that UK prices carry 20% VAT, so the multiplier must be applied to the net price, not the menu price.
| Food cost (ex VAT) | × 3.5 | × 4 | × 5 |
|---|---|---|---|
| £1.50 | £5.25 net / £6.30 | £6.00 net / £7.20 | £7.50 net / £9.00 |
| £2.50 | £8.75 net / £10.50 | £10.00 net / £12.00 | £12.50 net / £15.00 |
| £3.50 | £12.25 net / £14.70 | £14.00 net / £16.80 | £17.50 net / £21.00 |
| £4.50 | £15.75 net / £18.90 | £18.00 net / £21.60 | £22.50 net / £27.00 |
The top row shows the markup’s blind spot: a Margherita costing £1.50 at ×5 gives £9, which may be below what your street charges. The bottom row prices a premium pizza off the menu. Hence the second method.
Why cash margin wins
| Pizza | Food cost | Menu price | Net price | GP % | Cash margin |
|---|---|---|---|---|---|
| Margherita | £2.20 | £12.00 | £10.00 | 78% | £7.80 |
| Nduja, burrata, hot honey | £3.70 | £15.00 | £12.50 | 70.4% | £8.80 |
Illustrative figures. Use the costs from your own invoices.
The premium pizza has the worse percentage and earns a pound more every time it sells. Rent and energy bills are paid in pounds, not percentages. The rule: set a minimum GP (70%), then judge each pizza on its cash margin.
Add a third test the markup ignores: time on the bench. A pizza that takes 40 seconds longer to top costs you, on a Friday rush, one pizza in every 15 to 20 orders. An eight-topping special has to earn clearly more than a pepperoni.
Don’t forget VAT: 20% on every hot pizza
Under HMRC VAT Notice 709/1, everything eaten in is standard-rated at 20%, and so is hot takeaway food. Cold takeaway food can be zero-rated, but a pizza that leaves the oven hot never is. Soft drinks and alcohol are 20% too.
That makes the gap between menu price and what you keep much wider than on the Continent: a £13 pizza is £10.83 net in the UK, whereas a €13 pizza in France, at 10% VAT, keeps €11.82.
The VAT threshold as a pricing lever
You only have to register for VAT once taxable turnover passes £90,000 over a rolling 12 months (the threshold since April 2024). A small van or market pitch under it can charge £12 and keep £12, while a registered competitor keeps £10. Price with the threshold in mind: if you’ll cross it next year, set prices you can sustain once a sixth of each sale goes to HMRC, rather than having to add 20% overnight.
VAT on pizza takeaway: hot food, eat-in and delivery
How to price against local competitors
Check three to five pizzerias near you, in person or on their menus: their Margherita and one “reference” pizza (pepperoni or a meat feast). As a rough guide, an independent 12" Margherita often sits somewhere around £9 to £13, more in central London, less from a chain on a deal. Check your own area: it is the only market that matters.
Position yourself level with or slightly under the best local pizzeria, if your cost allows it, and never as the cheapest. Customers who come for the price leave for the next voucher, and a low price is very hard to undo once it is on the menu. Use clean prices (£11.50, £12) rather than £11.87 from a spreadsheet: easier to read, quicker at the till, and room for a 50p rise.
Meal deals
“2 large for £25” deals are the UK’s answer to price comparison. They work if they lift the order value (two pizzas plus sides instead of one), not if they discount the order customers would have placed anyway. Build them from your best-margin pizzas, cap the premium options or add a supplement, and check the cash margin per order, not per pizza.
Price architecture across your menu
An entry price, an anchor, regular steps
The Margherita is your entry price and your best GP. One or two premium pizzas act as anchors: next to a £16 pizza, the £13 one looks reasonable. In between, keep steps of £1 to £1.50 rather than a pizza at every price.
Extras
Charge each extra topping £1 to £2.50, at the same markup as the pizza or higher. A burrata or prosciutto add-on at £1 is almost always sold at a loss.
Eat-in, collection, delivery
Many pizzerias charge around £1 more to eat in than to collect. For your own delivery, count the box (20p to 35p), fuel and driver time: either a higher delivery price or a clear delivery charge.
Prices on Just Eat, Deliveroo and Uber Eats
With commission around 30% on the full order, a £12 pizza leaves £8.40, and you still owe £2 of VAT out of that. That is why many takeaways mark up their platform menus by 15–20%. It’s legal, but regulars compare, and the cash margin you just worked out shrinks anyway. The delivery commission calculator shows what is really left per order.
How to raise prices without losing customers
- Small and regular. 3–5% a year, when you refresh the menu. 50p on a £10 pizza is already 5%. A £1 jump every three or four years gets noticed far more.
- Less on the basics, more on the rest. Barely touch the Margherita, which everyone compares, and move the premium pizzas more.
- Pair the rise with something new: new pizzas, better mozzarella, a new menu. Customers see a change, not just a price.
- Don’t shrink the pizza quietly. Going from 12" to 11" without saying so takes 16% of the pizza away, and people notice. If you change size, say it.
- Update everything on the same day: printed menu, Google profile, website, platforms. A customer who sees two prices remembers the lower one.
Common pricing mistakes
- Copying a competitor’s price without knowing your own cost.
- One markup across the whole menu, from Margherita to premium.
- Working out margin on the VAT-inclusive price.
- Forgetting boxes, dips and fuel on delivery orders.
- Never reviewing prices after a cheese price rise. Mozzarella is the biggest line on the sheet.
- Giving discounts to anyone who asks. Businesses wanting “a deal” on a big order usually pay full price if you politely say no.
- Watching only GP%: £100,000 of sales for £53,000 of purchases is a red flag, whatever the menu says.
Pizza food cost calculator: cost and GP per pizza
FAQ
What markup should I use on a pizza?
Most independents multiply the ex-VAT food cost by 4 to 5, for a 20–25% food cost and a 75–80% GP. Never go below ×3.3 (70% GP). Then check the cash margin: a premium pizza can carry a lower markup and still earn more.
What GP should a pizza takeaway aim for?
70% or more on food, which means food cost at or under 30% of the net price. Cheese is the biggest cost: 10–20 g less mozzarella per pizza can shift your GP more than a price rise.
Should I be cheaper than my competitors?
Only slightly, and only if your costs allow it. The cheapest place attracts customers who leave for the next voucher. Match or sit just under the best local pizzeria and compete on quality and speed.
How often should I put my prices up?
Every year, in small steps (3–5%, often 50p), at your menu refresh. Customers notice a £1 jump every three years far more than regular small changes.
Can I charge more on delivery apps than in store?
Yes, it’s legal and common, to absorb roughly 30% commission. But regulars compare. Use the apps to be found, and move repeat customers to ordering direct.