Definition
Dynamic pricing
Dynamic pricing is adjusting menu or item prices based on demand, time of day, day of week, or channel, rather than holding one fixed price for every situation.
Dynamic pricing means your price can move with conditions: a higher price at peak Friday dinner, a lower one to fill a dead Tuesday, or a delivery-channel price that offsets marketplace commissions. Restaurants have quietly done versions of this for years (happy hour, prix fixe, early-bird, brunch pricing) but digital menus and delivery apps make finer-grained pricing practical. It is closely tied to Menu engineering and to metrics like Average check and RevPASH (revenue per available seat hour), because the goal is more profit per seat and per hour, not just a higher sticker price.
Handle it with care, because trust is fragile and margins are thin. With restaurant menu prices already up +4.1% in 2025 and 40% profitability goal / 48% raise prices of operators planning to raise prices if inflation persists, guests are price-sensitive and notice surge-style moves. The defensible use is offsetting real cost differences (a delivery-channel price that covers the 30%-40% of revenue a marketplace takes) and running honest off-peak discounts, not opaque surging on your regulars. AI can recommend price bands from demand and cost data, but you should set the guardrails. See menu optimization.
See it in action
Related terms
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