Glossary · Food cost percentage
Cost & margin
What is food cost percentage?
Food cost percentage is the share of a menu item's or a period's sales spent on ingredients — cost of food ÷ food sales, as a percentage. Most full-service restaurants target roughly 28–35%.
The formula: for a dish, plate cost ÷ menu price. For a period, (opening inventory + purchases − closing inventory) ÷ food sales. A $4.50 plate selling at $15 runs a 30% food cost — meaning 30 cents of every food dollar went to ingredients.
Why it matters to a restaurant
Food cost is one of only a handful of numbers an owner can actually move week to week, and it sits on the largest variable expense in the building. A few points in either direction is the difference between a healthy month and a scary one. It's also a fast diagnostic: when your actual food cost drifts above the theoretical cost your recipes predict, something concrete is leaking — portioning, waste, spoilage, price creep, or theft — and the gap tells you where to look before it eats the quarter.
The money angle
Because it's a percentage of sales, food cost has two levers: the cost side and the price side. On the cost side you tighten purchasing, portioning and waste; on the price side you make sure menu prices have kept pace with what ingredients actually cost today — many independents are quietly selling their best-loved dishes at last year's prices. Cutting even two or three points of food cost drops almost straight to the bottom line. The practical system for doing it consistently is in inventory & food-cost control that sticks.
Theoretical vs. actual food cost
Theoretical food cost is what your recipes should cost if every plate went out exactly to spec. Actual food cost is what your inventory says you really spent. Watching the two together — not either alone — is what turns food cost from a number you report into a number you control. A widening gap is an early warning; a stable, small gap means the kitchen is running tight.
Frequently asked questions
How do you calculate food cost percentage?
Divide the cost of food by food sales and multiply by 100. For a single dish, it's the plate's ingredient cost divided by its menu price. For a period, it's the food used — opening inventory plus purchases minus closing inventory — divided by food sales over the same period.
What is a good food cost percentage for a restaurant?
Most full-service restaurants aim for roughly 28–35%, though the right target varies by concept — a pizzeria or high-volume quick-service spot can run lower, while a steakhouse or seafood-heavy menu often runs higher. What matters most is that your actual food cost stays close to your theoretical target.
Why is my food cost percentage too high?
The usual culprits are rising supplier prices you haven't passed through in menu prices, over-portioning, waste and spoilage, theft, or menu prices that were set once and never revisited. Comparing your actual food cost to your recipe-based theoretical cost quickly shows where the leak is.