How to Favourably Price Everyday foods
Pricing Everyday foods and drinks to sell
The cost of an item is often the ultimate decider for students. Pricing Everyday items to sell can nudge students to make healthier choices.
A school canteen is a food business and all expenses that come from running a business need to be covered in the sales price of items. To make a profit, items need to be sold with a ‘mark-up’ added to the base cost.
Applying a lower ‘mark-up’ to Everyday items can attract sales while applying a higher mark-up to Occasional items can draw students away from purchasing these items
For example, Occasional snacks such as potato crisps can be sold at a mark-up of 200% while Everyday snacks such as fruit cups can be sold at a mark-up of 80 – 100%.
Worked example for pricing an Everyday item
- The cost of ingredients to make chicken soup = $1.20. The soup is an Everyday item so the canteen decides to apply an 80% mark-up to the soup to encourage students to buy it
- The sales prices = the cost price + 80% of the cost price. 80% of the cost price is $1.20 x 80/100 = $0.96
- The selling price would be $1.20+$0.96=$2.16 (round up to $2.20)
- The profit the canteen makes on the sale of each soup is $1.00 ($2.20 – $1.20)
Worked example for pricing an Occasional item
- The cost to a canteen to purchase a packet of plain potato crisps from their supplier is $1.20. The crisps are Occasional, so the canteen decides on a mark-up of 200%.
- The sales prices = the cost price + 200% of the cost price. 200% of the cost price is $1.20 x 200/100 = $2.40
- The selling price would be $1.20+$2.40=$3.60
- The profit the canteen makes on the sale of each packet of crisps is $2.40 ($3.60 – $1.20)
If you have any questions about pricing items in your canteen, contact the Healthy Kids Support line on (02) 9876 1300 or 1300 724 850 if you are calling from outside of Sydney.