Ways to Grow

How Menu Pricing Could Impact Your Sales

Marking up your price on DoorDash could be hurting your sales.

4 min read
6/23/2023
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Marked-up prices are one of the top customer complaints we receive — so it’s no surprise that they can discourage customers from ordering and decrease order volume. Below are actual reviews left by customers for restaurants with significant menu markups:

  • “Prices [are] higher than in store…Would have ordered every day if they were the same.”

  • “I love this restaurant. They are seriously up-charging from what they charge normally and I will never order from them...”

  • “Will not order ridiculous price increases.”

In this article, we’ll walk through why having consistent pricing could benefit you, as well as how to see the potential sales impact of the prices you choose via our tool in the Merchant Portal.

What are the benefits of having consistent pricing in your restaurant and on DoorDash?

There are a number of reasons keeping your menu pricing consistent helps your business:

  • More sales: According to an one-month long internal 2023 study of more than 4,500 restaurants on DoorDash, restaurants that mark up their menu prices can see up to 37% fewer sales and up to 78% lower reorder rates.

  • Greater volume: In a separate two month internal 2023 study of 4,000 small- and medium-sized and 2,000 enterprise restaurants over an eight-week period, restaurants that marked up items by more than 20% and then decreased those prices by 10% were estimated to see volume increases of up to 15% in one month and up to 21% in 12 months.

  • Better visibility: Restaurants with consistent pricing may rank higher on the app homepage.

  • Recognition: Menu pricing is part of the criteria for qualifying for the Most Loved program, which recognizes and rewards the top-rated and most reliable restaurants on DoorDash. Menu markups must be no higher than 10% to qualify for Most Loved.

For these reasons, while DoorDash doesn’t require delivery prices to match in-store prices, we recommend that restaurants price their delivery menu as close to their in-store menu as possible.

How do I calculate my markup rate? 

Menu markup rates are calculated by comparing prices for menu items that are included on both your DoorDash and in-store menus. The item prices on DoorDash are added together, and so are the in-store item prices. Then the DoorDash total is divided by the in-store total. For example, if in-store item prices are $2, $10, $12 and DoorDash item prices for the same items are $3, $12, $14, then the mark-up rate is 20.8%. This was calculated as (DoorDash rate: $3+$12+$14) / (In-store rate: $2+$10+$12) - 1.

The lower your menu markup rate, the more potential sales, orders, and new customers you may see on DoorDash. The shaded region is a projected range of impact in one month and in 12 months.

Where can I view the potential impact of my markup rate on my sales in the Merchant Portal?

To help you assess how your pricing could impact your sales, we’ve made a visualization tool, available in the Merchant Portal. To view it:

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  1. Log into the Merchant Portal.

  2. In the left hand navigation, click the Insights tab. From there, select Pricing

  3. On this page, you can see your current menu markup rate as well as the projected impact if you were to change it.

  4. Use the slider to estimate how menu markup rates can impact sales, orders, or new customers.

Where did the data for my menu markup rate come from?

This was calculated by comparing your DoorDash menu with your in-store menu. If you believe this is incorrect then please use the “Report” feature beneath your rate in the Portal. 

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How did you calculate the estimated impact shown in the slider?

These estimates are based on data from restaurants that marked up their prices and then reduced their markup. Factors including macroeconomic trends and consumer preferences may also impact projections, which are not guaranteed.

How can I update my menu prices? 

To learn how to change your prices, check out How to Edit Your DoorDash Menu Prices

Who do I contact if I have additional questions?

If you’re still having issues, email us at menu-pricing@doordash.com to have a DoorDash representative help you. If you use DoorDash Marketplace via a POS integration, use this guide.

DoorDash connects customers with high-quality restaurants like yours that they’re likely to love and return to. Pricing is one of multiple factors that helps determine how visible a restaurant is to potential customers. 

Looking for other ways to improve menu performance? Check out 11 Tips to Design a High Performing DoorDash Menu.