How often should I calculate my food cost?
At minimum, calculate food cost once a month. If you want better control, do it weekly. More frequent tracking helps you catch problems early, instead of being surprised at the end of the month.
Cost Control Guide for Restaurants
Importance of Food Cost Control
Food cost is usually the second-biggest expense in a restaurant after labor. For many concepts, a healthy food cost percentage sits around 25-35% of food sales. When that number creeps up even 2-3 points, it can wipe out most of your profit.
For example, if your restaurant does $80,000 in monthly food sales -
- At 30% food cost, you spend $24,000 on food.
- At 33% food cost, you spend $26,400.
That extra 3% is $2,400 a month, or almost $30,000 a year. Most owners feel this in cash flow, but they may not see the cause. It usually comes from small issues that add up- over-portioning, waste in prep, poor storage, last-minute buying, and weak menu pricing.
Good cost control does not mean cutting quality or giving guests less. In fact, guests often notice poor control in the wrong way - plates that look different each visit, menu items that disappear, or rushed changes when the kitchen is under pressure.
The real goal is stability. When your food cost is under control, you can -
- Keep your best-selling items on the menu
- Avoid constant price changes
- Pay your team and your bills on time
- Reinvest in better ingredients and equipment
Think of cost control as removing waste and tightening systems, not taking away value from the guest. When you do it right, your food stays consistent, your team knows what "right" looks like, and your bottom line improves.
Simple Food Cost Formulas and Reports
Before you can fix food cost, you need to see it clearly. Many owners skip this step because the numbers feel confusing. The good news is you only need a few simple formulas and a basic habit of checking them on a regular schedule.
Start with this core formula -
Food Cost % = (Cost of Food Used / Food Sales) x 100
To find Cost of Food Used for a period (usually a week or month), use -
- Beginning Inventory
- Plus. Purchases
- Minus. Ending Inventory
Cost of Food Used = Beginning Inventory + Purchases - Ending Inventory
Example for one month -
1. Beginning inventory - $10,000
2. Purchases - $25,000
3. Ending inventory - $9,000
Cost of Food Used = 10,000 + 25,000 9,000 = $26,000
If your food sales for that month were $80,000.
Food Cost % = (26,000 / 80,000) x 100 = 32.5%
Now you can compare this to your target range (for many restaurants, around 28-32%). If you are over your target, you know something is off.
Each week or period, pull these basic reports from your POS and accounting -
- Food sales by day and by category (apps, mains, desserts, etc.)
- Void and comp report (to see mistakes and giveaways)
- Discount report (to see how promos affect sales)
These reports, plus your inventory numbers, give you a clear picture of where money is going. Once you understand these numbers, every other step in cost control becomes easier. You stop guessing and start making decisions based on facts, not feelings.
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Recipe Costing 101
Recipe costing is the base of food cost control. If you do not know what each plate costs, it is very hard to price your menu or protect your margins. The goal here is simple - write down what goes on the plate and what each part costs.
Step 1. List every ingredient
Pick one menu item. Write down every ingredient used to make one portion, including small items like oil, butter, and garnish. Do not guess. Watch a cook make the dish and measure what they actually use.
Step 2. Convert to unit cost
Take your supplier invoice and find the price and pack size.
Example -
- You buy 10 kg of chicken for $60.
- Cost per kg = $60 / 10 = $6 per kg.
- If one portion uses 0.20 kg, chicken cost per plate = 0.20 x $6 = $1.20.
Do this for each ingredient in the recipe.
Step 3. Add a simple yield factor
Some items lose weight when trimmed or cooked. If 10 kg of meat gives you only 9 kg usable after trimming, your true cost per kg is higher.
True cost per kg = $60 / 9 = $6.67 instead of $6.
Use this higher number in your recipe cost.
Step 4. Total the plate cost
Add the cost of all ingredients for one portion. Example -
- Chicken. $1.20
- Rice. $0.25
- Sauce. $0.40
- Veg and garnish. $0.45
Total plate cost = $2.30
If you sell the dish for $11, then-
Food Cost % for this dish = (2.30 / 11.00) x 100 = 21%
This lets you see which dishes are strong and which are weak. Once you have recipe cards for each item, you can adjust prices, change ingredients, or highlight higher-margin dishes with confidence.
Portion Control
Even if your recipes are cost correctly, food cost will drift if portions are not consistent. A "little extra" on each plate feels small at the moment, but it adds up fast. If every cook adds just 20-30 grams more protein than the recipe, you can lose hundreds or thousands each month.
Portion control is not about being stingy. It is about giving every guest the same plate every time and protecting your margins at the same time.
Start with clear standards
Write simple build sheets for your main menu items. For each plate, list -
- Exact protein weight (for example, 180 g chicken)
- Number of scoops for sides
- Amount of sauce or dressing
- Garnish details
Add photos if you can. Hang these where cooks can see them.
Use the right tools
Make it easy for your team to portion correctly -
- Scales for proteins and high-cost items
- Color-coded scoops and ladles for sides and sauces
- Pre-portioned items (for example, diced chicken in bags or cups)
The more you can "measure by tool" instead of "measure by eye," the better your consistency will be.
Train and check regularly
Show your cooks why portion control matters. Walk them through how an extra ounce on each plate affects food cost and profit. Do random checks during service - weigh a portion, compare it to the standard, and correct gently if needed.
Balance control and speed
You do not need to weigh every single item in the middle of a rush. Use scales more during prep and training. Once portions are prepped correctly, the line can move faster with scoops and ladles. With clear standards, the right tools, and regular checks, you can protect both your food cost and your guest experience.
Inventory and Purchasing
Good inventory and purchasing habits are one of the strongest ways to control food cost. When you buy too much, items spoil. When you buy too little, you rush orders, pay higher prices, or 86 menu items. The goal is simple - keep the right amount of product on hand, not "as much as possible."
Start with regular inventory counts
Do at least one full food inventory each week, always on the same day and time (for example, Sunday night after close). Count -
- Dry storage
- Walk-in cooler
- Freezer
- Line coolers
Use the same counting sheet each time. Write down quantities in the units you buy (cases, kilos, liters, etc.). Apply your current prices to get the total inventory value. This helps you calculate food cost and see if you're sitting on too much stock.
Set par levels
Par levels tell you how much of each item you want to keep on hand. To set them, look at -
- Average weekly usage (how much you actually use)
- Delivery schedule (how often vendors deliver)
- Shelf life (how long the product stays good)
For example, if you use 30 kg of chicken a week and get two deliveries, you might set a par of 18-20 kg per order. This covers normal use plus a small buffer.
Use order guides
Build an order guide for each vendor. List every item, pack size, current price, and your par level. Before placing an order, walk the storage areas with your sheet and write how much you need to reach par. This prevents "ordering by memory" or guessing.
Watch slow movers and high-risk items
Flag items that spoil easily or sell slowly. Check them more often. If they sit on the shelf week after week, adjust your par, change recipes, or remove them from the menu. Smart inventory and purchasing prevent waste before it starts.
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Waste Tracking
Every kitchen has waste. The problem is when you do not see it or measure it. A few extra trays over-prepped, a pan burned during rush, a sauce that spoils in the walk-in - these feel small in the moment, but they add up to real money. Waste tracking helps you see where food is being lost so you can fix the cause, not just the symptom.
Set up a simple waste log
You do not need a complex system to start. Use a clipboard, whiteboard, or a simple digital form. For each waste event, record -
- Date and time
- Item name
- Quantity (for example, 3 chicken breasts, 1 pan of rice)
- Reason (spoilage, over-prep, re-fire, dropped, wrong order, etc.)
- Who logged it
Make it easy for staff to use. Keep the log in a clear spot everyone passes.
Explain why it matters
Tell your team the goal is not to blame anyone. The goal is to find patterns and fix problems together. Show them how a pan of burned protein or a daily over-prep can cost hundreds by the end of the month.
Review waste weekly
Once a week, review the log with your manager or chef. Look for patterns -
- The same item wasted over and over
- The same station or shift creating more waste
- Common reasons (over-prep, re-fires, wrong orders)
Pick the top two or three issues to fix. Examples -
- If over-prep is high, adjust prep sheets to match sales.
- If re-fires are common, retrain on ticket reading or cooking times.
- If spoilage is high, reduce par levels or improve storage.
Turn tracking into action
Update prep lists, change storage spots, adjust line setup, or tweak recipes based on what you find. Waste tracking only works if it leads to changes. Over time, you should see both waste and food cost go down, while your kitchen runs more smoothly.
Smarter Vendor Management and Negotiation
Vendors are key partners in your food cost. You need them to be reliable, but you also need fair prices and the right products. Good vendor management is not about squeezing every cent. It is about clear standards, comparison, and steady communication.
Compare apples to apples
When you check prices, make sure you compare the same -
- Pack size (5 kg case vs. 4 kg case)
- Grade and quality (choice vs. select, fresh vs. frozen)
- Yield (trimmed vs. untrimmed products)
A cheaper price per case is not always better if the yield is lower. For example, a cheaper cut with more trim waste might cost more per usable kilo than a slightly higher-priced, better-trimmed product.
Build a product list
Create a list of key items (meat, dairy, produce, high-usage dry goods) with -
- Item name
- Brand or grade
- Pack size
- Current price
- Approved substitutes
This helps you stay consistent across orders and locations. When prices jump, you already know which substitute items are acceptable.
Track key item prices
Pick your top 15-20 high-cost or high-volume items (like chicken, beef, cheese, oil). Track their prices weekly or at least monthly. A simple spreadsheet works fine. When you notice steady increases, you can -
- Ask about alternatives
- Adjust menu prices
- Change recipes or portions
Negotiate with information
When you talk to vendors, be clear and respectful. Share your volume, your need for stable pricing, and your focus on long-term partnership. Ask about -
- Better pricing for committed volume
- Delivery schedule that reduces rush orders
- Pack sizes that reduce waste
You do not have to switch vendors often to get better control. Just by knowing your numbers, tracking key prices, and having planned substitutes, you protect your margins and keep your kitchen running smoothly.
A Weekly Cost Control Routine You Can Stick To
Cost control only works if it becomes a habit. You do not need a perfect system on day one. You just need a simple weekly routine that you and your team can follow without a lot of stress.
Step 1. Pick your "numbers day"
Choose one day each week for cost control tasks. Many restaurants use Sunday night or Monday morning. On this day, you will -
- Do inventory
- Review waste
- Check key reports
- Look at vendor prices
Put it on the calendar and treat it as non-negotiable.
Step 2. Assign clear owners
Decide who is responsible for each part -
- Inventory. kitchen manager or chef, with one other person
- Waste log. all cooks enter, manager reviews
- Recipe cards and portion standards. chef or lead cook
- Vendor pricing and orders. owner or manager
When everyone knows their role, things get done more consistently.
Step 3. Use a simple checklist
Create a one-page checklist for your weekly routine, for example -
- Take full food inventory
- Calculate food cost % for the week or period
- Review waste log and pick top 2-3 issues to fix
- Check key POS reports (sales by category, voids, discounts)
- Review vendor prices for key items
- Update prep sheets, pars, or recipes if needed
- Share key numbers with the team
Step 4. Share results with your staff
Pick one or two simple numbers to share, such as food cost % and total weekly waste. Keep it short and clear. Thank the team when numbers improve and focus on fixes when they do not.
Over time, this routine will feel normal. You will spot problems earlier, make smaller corrections, and avoid big surprises. The goal is not perfection. The goal is steady control that protects your profit while you keep serving food you are proud of.
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Frequently Asked Questions
How does portion control affect guest satisfaction?
Consistent portions build trust. When guests know what to expect on each visit, they feel they're getting good value. If portions swing up and down, some guests feel shorted and may stop coming - even if your food tastes good.
What reports should I check in my POS for cost control?
Focus on -
- Sales by item and category
- Voids and comps
- Discounts and promos
- Menu mix report (top sellers and slow movers)
These reports show what's selling, what's being given away, and where mistakes happen.
- Sales by item and category
- Voids and comps
- Discounts and promos
- Menu mix report (top sellers and slow movers)
These reports show what's selling, what's being given away, and where mistakes happen.
How do I know if my cost control efforts are working?
Look for a few signs -
- Food cost % moves closer to your target
- Less waste recorded in the log
- Fewer 86'd items and last-minute orders
- More consistent plates and fewer guest complaints
Track these week by week. Small, steady improvements add up.
- Food cost % moves closer to your target
- Less waste recorded in the log
- Fewer 86'd items and last-minute orders
- More consistent plates and fewer guest complaints
Track these week by week. Small, steady improvements add up.
What is a good food cost percentage for a restaurant?
For many restaurants, a healthy food cost percentage is around 25-35% of food sales. The exact target depends on your concept, menu, and price point. The key is to pick a realistic target and track it every week.
