Restaurant food cost: how to calculate and control it
2026-06-18 · 10 min
Food cost percentage is one of the few numbers that decides whether a restaurant is profitable. Here's how to calculate it, what's healthy, and seven ways to bring it down.
What food cost percentage means
Food cost percentage is the share of a dish's selling price that goes to the ingredients in it. If a dish sells for 40 and the ingredients cost 12, the food cost is 30%.
It's one of the few numbers that directly decides profitability, and most owners never track it precisely — they guess, and the guess is usually optimistic.
How to calculate it (formula + example)
Per dish: food cost % = ingredient cost ÷ selling price × 100.
Across the whole kitchen for a period: (opening inventory + purchases − closing inventory) ÷ food sales × 100.
Example: you start the month with 20,000 of stock, buy 60,000, and end with 18,000. Food used = 62,000. If food sales were 200,000, your food cost is 31%.
What a healthy food cost looks like
Most full-service restaurants aim for 28–35%. Quick-service and pizza can run lower; steak and seafood concepts run higher because the protein is expensive.
There's no single "correct" number — a high food cost can still be very profitable if volume and price are right. What matters is that you know yours and watch the trend.
Prime cost: the number that really matters
Food cost alone doesn't tell the whole story. Prime cost — food cost plus labour cost — is the metric experienced operators watch, and the target is usually under 60–65% of sales.
If prime cost creeps above that, profit disappears no matter how busy you are. Track them together.
Seven ways to lower food cost
1. Cost every recipe precisely — you can't manage what you don't measure.
2. Re-price or re-engineer dishes whose food cost is above target.
3. Tighten portion control with standard scoops, ladles and scales.
4. Cut waste: track what's thrown away and why.
5. Negotiate with suppliers and review prices monthly — input costs drift.
6. Use menu engineering: promote high-margin items, fix or drop low-margin ones.
7. Watch theft and over-pouring — small daily leaks add up to real money.
Track it monthly, not yearly
Food cost moves with supplier prices, portioning discipline and your menu mix. Checking it once a year tells you nothing useful; checking it monthly catches a problem while it's still small.
Costrify shows your real profit on every delivery platform — after commission, fees, food cost and ad spend — and tells you exactly what to fix. Try the live demo free.