Food Cost Percentage: How to Calculate and Control It
Food cost percentage is the share of your sales that goes on the ingredients you sell. It is the single most-watched number in a restaurant kitchen, because a few points in either direction is often the difference between a profitable week and a loss.
The food cost percentage formula
Food cost percentage compares what you spent on ingredients to what you sold:
- Food cost % = (cost of ingredients used ÷ food sales) × 100
The "cost of ingredients used" is your cost of goods sold (COGS) for food over a period, not just what you bought. To get it right you account for stock:
- Opening stock + purchases − closing stock = ingredients used
A worked example
Say in one week you started with £2,000 of stock, bought £6,000 more, and ended with £2,500 of stock. Your ingredients used were £5,500. If food sales were £20,000:
- £5,500 ÷ £20,000 × 100 = 27.5% food cost
What is a healthy food cost percentage?
Most UK restaurants aim for 28% to 35%, depending on format:
- Quick service and pizza: often 25 to 30%
- Casual dining: around 28 to 35%
- Fine dining: can run higher on premium ingredients, offset by price
Food cost rarely lives alone. Track it alongside labour as your prime cost, the two costs you can actually control week to week.
Five ways to bring food cost down
- Cost your recipes. Know the plate cost of every dish, then price to a target margin.
- Tighten portioning. Inconsistent portions are invisible waste. Standardise and weigh.
- Cut waste. Track spoilage and over-prep against sales; turn excess into specials.
- Review supplier prices. Prices drift up quietly. Compare regularly and negotiate.
- Engineer the menu. Promote high-margin dishes; fix or drop the low-margin ones.
Measure it weekly, not monthly
The trap is calculating food cost once a month, after the period has closed, when it is too late to act. Alpa builds your food cost into a real-time P&L from your invoices, POS, and bank, so you see it move week by week and can pull a lever while it still matters.