The food cost formula
Food cost % = (beginning inventory + purchases − ending inventory) ÷ food sales × 100. The part in parentheses is the cost of goods sold (COGS): what you actually used.
Example
You start the month with $8,000 of inventory, buy $12,500 and end with $7,200. You used $13,300. With $43,000 in food sales, the food cost is 13,300 ÷ 43,000 = 30.9%.
How to lower your food cost
- Count inventory on the same day and time every period.
- Standardize recipes and portion sizes, and train the line on them.
- Track waste: spoiled food, mistakes and staff meals.
- Compare supplier prices every quarter.
- Re-price dishes whose plate cost went up (use the menu price calculator).