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Menu pricing psychology: what works, what's a myth

Menu pricing psychology is how the way prices are shown changes what diners order and spend. A few ideas have real evidence behind them: leaving the dollar sign off a sit-down menu, a high-priced item that makes the rest look reasonable, and offering a middle option people settle on [1] [4] [5]. Others, like the "sweet spot" where eyes supposedly land first, didn't hold up when researchers tracked diners' eyes [2].

Below: each common trick with what the research actually found and how strong it is, how to use the ones worth using, what changes when the menu is read on a phone, and how to test a change on your own sales instead of trusting anyone's list, including this one.

The tactics at a glance

TacticWhat the evidence saysStrength
No dollar sign ("14" not "$14.00")Diners spent more in one restaurant study [1]One study, one place
Prices ending in 9 or .95Raised sales in retail field experiments [3]Good, but not tested on menus there
A high-priced anchor itemA dearer option shifts choices toward the next one down [4]Strong in lab research
Three sizes, with the middle as the targetPeople lean to the middle of a range [5]Strong in lab research
The menu "sweet spot" (top right)Eye tracking found diners read menus in order, like a book [2]Myth
Fewer choices sell moreA review of 50 experiments found the average effect near zero [6]Unclear; depends on the case
Fancy descriptions sell 27% moreWidely quoted figure from a lab later found to have misreported data [7]Don't rely on it

"Strength" here is our plain reading of the research, not a score. Every one of these is worth testing on your own menu before you trust it.

1. Leave the dollar sign off (on a sit-down menu)

Researchers from Cornell tested three menus on lunch guests at a restaurant of the Culinary Institute of America: prices as plain numbers (14), with a dollar sign ($14.00), and in words (fourteen dollars). Guests with the plain-number menu spent more [1]. The idea behind it is the "pain of paying": reminders of money make spending feel worse, an idea from earlier research on how people feel about payments [8].

How to use it: write "14" or "14.5", not "$14.00". The authors themselves say the result may hold only for that setting [1], so treat it as a low-cost thing to try, not a sure gain. On a takeout counter menu or an ordering page, clarity can matter more; a diner deciding fast still needs to see the price at a glance.

2. Price endings: .99, .95 or whole numbers?

In field experiments with a clothing catalog, prices ending in 9 raised demand in all three tests, more for new items, and less when items were also marked "Sale" [3]. That is retail, not restaurants, but it's the best field evidence on endings there is.

What owners commonly do, and why (opinion, not research):

Price endings are small money on each plate. Getting the base price right matters far more; the method is in how to price a menu item.

3. Anchors and decoys: the item you don't expect to sell

When a clearly more expensive option sits next to two others, people's choices shift. In a classic set of experiments, adding an option that was worse than one of the others in every way pulled choices toward the option it made look good [4]. On a menu, a $48 seafood platter next to $24 and $28 mains makes the $28 dish feel like the sensible pick, even if few people order the platter.

How to use it honestly:

4. The middle option: sizes and bundles

Given a small, medium and large, many people choose the middle one; research calls it the compromise effect [5]. That's useful for drinks, pizza, bowls and family meals:

Check the food cost of each size, not just the medium. A large that costs you more to make than it adds in price loses money every time someone upgrades. The sums are in how to calculate food cost percentage.

5. The "sweet spot" is a myth

For decades, menu advice said diners' eyes go first to the upper right of a two-page menu, so that's where the most profitable dishes should sit. In 2012, a San Francisco State University study tracked where diners' eyes actually went: they read the menu in order, like a book, slowly, reading for information rather than scanning. The researcher found no sweet spot, only a "sour spot" at the bottom corners of the page, where few people looked [2]. The original idea traced back to a 1978 article, not to eye tracking of real diners [2].

What to do instead: assume people read your menu top to bottom, section by section. Lead each section with what you most want to sell, and don't bury anything important at the bottom of a page.

6. Descriptions: be useful, not flowery

Many guides say "descriptive names" raise sales by 27%. That figure comes from the work of a Cornell food researcher who resigned in 2018 after the university found he had misreported research data; many of his papers were retracted [7]. That doesn't prove descriptions don't work. It means the number shouldn't be repeated as fact.

What clearly helps a diner decide: what's in the dish, how it's cooked, how big it is, whether it's spicy, and what it's served with. "Slow-braised beef, rice, pickled onions, mild" sells better than "Grandma's Comfort Bowl" because the diner knows what they're getting. A clear description also answers the allergy question before it's asked. A formula for descriptions, with twelve before-and-after rewrites, is in how to write a restaurant menu.

7. How many items: does a shorter menu sell more?

The famous jam study suggested people buy less when given too many choices. A later review pooled 50 experiments with over 5,000 people and found the average effect was virtually zero, with big differences from study to study [6]. So "fewer items always sells more" isn't proven.

The better reasons to keep a menu short are practical: fewer ingredients to buy and waste, faster tickets, more consistent plates, and a menu a diner can read on a phone without endless scrolling. Cut the dishes that sell little and earn little (see the grid below), not a fixed number.

8. Layout: don't line prices up in a column

A common rule (opinion, from menu designers, not tested in the studies above): put each price right after its description in the same font, not in a right-hand column with dotted lines. A column invites diners to scan down the prices and choose by cost. With the price at the end of the description, they read the dish first.

Other layout habits that follow from the eye-tracking finding [2]: clear section headings in the order of a meal, the dish you want to sell first in each section, and a small box or a single photo for one dish per section, not for every dish.

9. Online menus read on a phone

Most of these ideas came from printed menus. On a phone, a diner sees a few items at a time and scrolls. What changes:

10. Menu engineering: which dishes to push

Psychology tells you how to sell a dish. Menu engineering tells you which dishes to sell. The classic grid, from Kasavana and Smith's 1982 work [9], sorts each dish by how many you sell and how much each one earns in dollars (price minus food cost):

Earns a lot per plateEarns little per plate
Sells a lotStars: keep, feature, protect qualityPlowhorses: raise the price a little or trim the cost
Sells littlePuzzles: move them up, describe them better, use them after an anchorDogs: cut them, or rework them

Your POS's product mix report gives the counts; your plate costs give the earnings. Do this once a quarter, then use the tactics above on the stars and puzzles. The cutoffs, an 8-item menu worked out and a worksheet with formulas are in menu engineering.

11. Raising prices with less pushback

Practical habits owners use (opinion):

How to test a change on your own menu

  1. Pick one change (no dollar signs, a new anchor dish, a reordered section).
  2. Write down four weeks of numbers before: covers or orders, average check, and how many of the target dishes sold. Your POS has all three.
  3. Make the change and leave it for four weeks. Avoid holidays and other changes at the same time.
  4. Compare the same days of the week. If the average check or the target dish's share didn't move, the trick didn't work for your diners; undo it and try the next.

An online menu makes this easier, because you can change it the same day and every order is already counted.

Common mistakes

Questions

What is menu psychology?

How the layout, wording and way prices are shown on a menu change what diners choose and spend. Some effects have evidence (the dollar sign study, anchors, the middle option) [1] [4] [5]; some are myths (the sweet spot) [2].

Why do restaurants leave the dollar sign off?

A Cornell study found lunch guests spent more when prices were plain numbers than with a dollar sign or in words [1]. It was one study at one restaurant, so it's worth trying, not guaranteed.

Is $9.99 or $10 better on a menu?

Prices ending in 9 raised sales in retail experiments [3]. Fast and casual places often use them; sit-down places often use whole numbers. Pick one style for the whole menu.

Where should the most profitable items go on a menu?

At the top of their section. Diners read menus in order [2], so the first dishes in each section are seen by almost everyone.

What is a decoy item on a menu?

A higher-priced dish placed so the next one down looks reasonable [4]. It should still be a real dish you're happy to sell.

What are the different approaches to menu pricing?

Cost-based (plate cost รท target food cost), competition-based (what nearby places charge) and value-based (what diners will pay). Most owners start from cost and check the market; the steps are in how to price a menu item.

Want a menu you can change and test in minutes? Build your menu site free from a photo of your menu, with pickup ordering and no fee per order. More answers are in all our guides.

Sources

  1. Yang, Kimes and Sessarego, $ or dollars: effects of menu-price formats on restaurant checks, Cornell Center for Hospitality Research, 2009; and Diners spend more when menus don't use dollar signs, Cornell Chronicle, 2009.
  2. Study counters menu sweet spot theory, San Francisco State University via EurekAlert, 2012; Study counters prevailing restaurant menu theories, Nation's Restaurant News, 2012.
  3. Anderson and Simester, Effects of $9 price endings on retail sales: evidence from field experiments, Quantitative Marketing and Economics, 2003.
  4. Huber, Payne and Puto, Adding asymmetrically dominated alternatives, Journal of Consumer Research, 1982.
  5. Simonson, Choice based on reasons: the case of attraction and compromise effects, Journal of Consumer Research, 1989.
  6. Scheibehenne, Greifeneder and Todd, Can there ever be too many options? A meta-analytic review of choice overload, Journal of Consumer Research, 2010.
  7. Cornell prof Brian Wansink resigns after academic misconduct investigation, Cornell Daily Sun, Sept 20, 2018.
  8. Prelec and Loewenstein, The red and the black: mental accounting of savings and debt, Marketing Science, 1998.
  9. Kasavana and Smith, Menu Engineering: A Practical Guide to Menu Analysis, Hospitality Publications, 1982.