Food cost
Food cost is the value of ingredients used divided by sales, as a percentage. Example: 3,000 of ingredients on 10,000 of sales = 30%.
Food cost is the value of ingredients used divided by sales, as a percentage. Example: 3,000 of ingredients on 10,000 of sales = 30%.
Most restaurants target 28–35%. A high number means waste, low pricing, or high purchase prices. Work it out with the free dish-cost calculator.
How to calculate food cost %
The actual method: (opening inventory + purchases − closing inventory) ÷ food sales × 100. The theoretical method: total ingredient cost of the dish ÷ its selling price. The gap between the two exposes waste, over-portioning and recording errors. Many restaurants aim for roughly 28–35% as a general reference, varying by cuisine.
How to lower it without hurting quality
Start by identifying your top 10 selling items and those with the highest percentage. Adjust portions, price or recipe, watch waste and storage, and negotiate with suppliers on heavy items.
- Cost every recipe accurately
- Compare actual to theoretical % monthly
- Record waste with its reason
- Review prices when raw materials rise
A numeric example
A shawarma recipe: ingredients cost 1.10 JOD and sell for 3.50 JOD, so cost % = 1.10 ÷ 3.50 ≈ 31.4%. If your target is 30%, the right price is ≈ 3.67 JOD (1.10 ÷ 0.30). (Illustrative figures.)
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How is it different from prime cost?
Food cost is ingredients only; prime cost = food cost + labour cost.