What is restaurant food cost ?
Restaurants are the best place to go when you're hungry and looking for a quick bite. It's always fresh, it's always delicious, and it's always fast! The main downside to eating out is that the food cost can be pretty high. But don't be discouraged! With this helpful guide, you'll learn everything you need to know about restaurant costs so that you can figure out if it's worth spending your hard-earned money on a meal out.
How to Cut Down on Restaurant Food Cost
How to save on restaurant food
No matter how good a cook you are, it is difficult to match the restaurant-style food that perfectly layered sandwich with grilled steak, pickled veggies, handmade sauces, and finely melted cheese. And those fried chicken wings with the right amount of crisp outside and juicy inside! Mouthwatering? But, it's just not possible to crack these recipes. And that's the reason we all droll over restaurant food. It's delicious, it's perfect and it's fast!
Come on, we all will agree even if we attempt to recreate that restaurant-style sandwich, it might take hours especially if you are trying to grill that steak to perfection and making those sauces on your own! And what's the guarantee that it will taste exactly like your favorite restaurant! So, don't feel guilty, the next time you decide to lunch outside on a weekday.
Yes, like everything else in life, here is a downside too. However tasty the menu items be, they can never compensate for your constantly debiting bank account over food. We all know while outside food can be scrumptious, it is expensive. And regularly eating outside even at a quick-service restaurant, can burn a hole in your pocket.
Let's dive a little deep to understand why eating outside costs so much!
Now, after learning about pricing menu and menu engineering, let's take a look at how you can save on restaurant food costs -
Come on, we all will agree even if we attempt to recreate that restaurant-style sandwich, it might take hours especially if you are trying to grill that steak to perfection and making those sauces on your own! And what's the guarantee that it will taste exactly like your favorite restaurant! So, don't feel guilty, the next time you decide to lunch outside on a weekday.
Yes, like everything else in life, here is a downside too. However tasty the menu items be, they can never compensate for your constantly debiting bank account over food. We all know while outside food can be scrumptious, it is expensive. And regularly eating outside even at a quick-service restaurant, can burn a hole in your pocket.
Let's dive a little deep to understand why eating outside costs so much!
- The reason behind that hefty menu pricing is the food cost percentage the restaurant sets. Food cost percentage is how much revenue a restaurant spends on buying supplies for restaurant food. For that, restaurant owners will need foods sales food cost.
- Calculate food cost percentages in easy. You can calculate the ideal food cost percentage by dividing the actual food costs (or say total cost of goods sold) by total food sales and multiplying it by 100.
- To calculate the total cost of goods sold or COGS, restaurants need three things-- beginning inventory, inventory purchases, and ending inventory.
- Now add beginning inventory purchases and inventory purchases then subtract ending inventory.
- The restaurant charges four times the total food cost, i.e the ingredients purchased for a dish!
- On average, the restaurant food cost percentage is near 30% and can further spike to 45%.
- Menu engineering plays an important role in restaurant accounting, determining profit margin. The cost of a menu item not only covers actual food cost but also labor cost, food service cost, restaurant marketing, cost of food waste, inventory management, and more.
- Restaurant owners set target food costs and exercise other cost control like labor cost and restaurant marketing, reducing food waste to ensure a strong bottom line.
Now, after learning about pricing menu and menu engineering, let's take a look at how you can save on restaurant food costs -
Make use of coupons
- Restaurants, both-- quick service and full-service restaurants, offer coupons to promote their business. All you need to do is to sign up for the SMS and email alerts. Before you step out for a meal, just check your mail. We never know if a $10 coupon off on your favorite menu item might be waiting to surprise you!
- Similarly, a lot of restaurants, tie up with banks. If you are using their credit card or debit card while making payment at the restaurant, you tend to get a 10-15% off!
- Contactless payments have become the new mode of payment. More people, especially youngsters, prefer to pay via digital wallets. To get more people to sign in, these mobile wallet companies, as a promotional strategy, offer several incentives like cash-back and discount coupons on meals mostly from a quick-service restaurant. They even partner with food delivery apps, so when you make a payment using a digital wallet you can get tasty food from your favorite restaurant at a cost less than the menu prices.
- Remember, all these coupons come with an expiry date. So do use them when they are valid, or you'll lose discounted menu food.
- Another important thing is while you do have a coupon be mindful of using it. Make sure to show it to the person handling the pos system at the restaurant while ordering or making payment.
- Also, these days there are apps dedicated to coupon service. Just download them, and you can see latest daily deals by your nearby restaurants , salons and more.
It’s hard to know what to order at a restaurant.
You have a limited budget and don’t want to spend all your money on one meal.
Shop around for the best deals
- Social Media has become the preferred platform of marketers these days. And especially for the restaurant industry , given how tempting graphics they can use to lure us into buying that colourful, cheesy pizza or that creamy bagel! So follow your favorite quick service restaurant chain or cafe on social media as they regularly post meal deals to attract people.
- Some restaurants especially quick service chains follow strategies like Big Wednesday' where the offer major discounts of upto 50% on most of the menu items on that particular day of the week. Following these restaurants on Instagram can remind you to grab these offers.
- Infact, some small budding restaurants come up with deals where you post your picture while enjoying food at their place and tag them, they offer you upto 20% off on menu items or a free desert on your next visit.
- Next time you are planning to eat outside, run through your social media account so you do not miss on any deal.
Learn to cook
- As punishing it might sound, home-cooked food is an extremely budget-friendly and healthy option.
- We are not saying to completely abandon the restaurant food, just limit it to weekends or special occasions instead of dining out every day or multiple times a week.
- For other days, you can learn to cook easy dishes, like bread omelet, a quick sandwich, and fruit salad. They are not only healthy options but can save you a lot of dollars. While a cheese omelet can cost you somewhere near $8, you can get a dozen eggs for $2. Well, we told you, cooking at home can save you a lot of money!
- Keep ready-to-cook packs like instant noodles or pasta at your home. They are not only easy to cook but quite tasty. Add veggies or meat of your choice, top it with some cheese and relish your meal at a very low cost. Remember, restaurants charge menu food four times more than the actual food cost.
Get a group together and order in
- Yes, the bigger, the cheaper! Going out with friends is something we can never say no' to. And it costs cheaper bills at restaurants! When you order in a group, the food cost per dish and head comes out to be a lot less that when you dine in alone. Anyway, portion sizes in USA are quite large. Sharing in can not only save money, it can help reduce food waste as well.
- When eating out in a group, how can we forget a groupon. So many restaurants quick service , full service and cafes have tie-ups with Groupons. Go to the app and pick their offer of the day, where you can get upto 50% off on prescribed minimum order value.
Happy hour!
Keep a tab on social media pages of your favorite restaurant to be informed on Happy Hours'. It is a restaurant marketing strategy offering discounted menu items so to ensure good business on slow days like early weekdays. Reach your restaurant during the happy hours', to enjoy your favouraite menu item at low cost.
You can get to enjoy appetizers at half priced during the happy hours.
You can get to enjoy appetizers at half priced during the happy hours.
Avoid buying these things in a restaurant
- Never buy a water bottle in the restaurant. Restaurant business is thriving on bottled-water money. They fill a fancy glass bottle with mineral water and charge over 50% more. Carry your water bottle with you next time you go to dine in! You can use that money on buying your favorite menu item .
- The same case is with soda beverages. A cold drink at a restaurant can cost $2, while you can drink the same from a bottle in your refrigerator for hardly 30 cents. So next time, skip buying soda drinks at a restaurant.
- Similarly, for tea and coffee. These restaurant charges these beverages just thrice their actual cost . It's better to save tea and coffee for home, as a way of cost control when dining out.
- Appetizers are waste of money. A lot of dine in restaurants offer complimentary chips and dip, toasted bread and wafers, relish them and avoid buying those highly-priced appetizers. And just like that, you can easily save upto dollar 8 on your bill. And that's how you can optimize food cost while eating out at a restaurant.
Take leftovers home and re-heat them
Like we said, American restaurants offer large portion sizes. Often, it is too much for a single person to finish the dish at once. This does not only leads to food waste , but costs you high.
So, when you go to dine out alone, and feel the portion sizes of your dishes are large, ask the waiter to pack the leftovers. Go home, and reheat the food and you can have it as next meal of the day in just price of one.
And if you are the one, who cannot stop eating while there is food on the plate, ask the waiter to get you a container at the beginning of the meal. Before you start eating the food, keep the go-to portion in the container.
Similarly, try to avoid deserts in the restaurant. Most of the cupcakes and brownies are ready-made, all that these restaurants do is just icing and serving them in a fancy plate in exchange of quite some dollars. It is better to pick a desert from your refrigerator till you reach home. Take leftovers home and re-heat them.
So, when you go to dine out alone, and feel the portion sizes of your dishes are large, ask the waiter to pack the leftovers. Go home, and reheat the food and you can have it as next meal of the day in just price of one.
And if you are the one, who cannot stop eating while there is food on the plate, ask the waiter to get you a container at the beginning of the meal. Before you start eating the food, keep the go-to portion in the container.
Similarly, try to avoid deserts in the restaurant. Most of the cupcakes and brownies are ready-made, all that these restaurants do is just icing and serving them in a fancy plate in exchange of quite some dollars. It is better to pick a desert from your refrigerator till you reach home. Take leftovers home and re-heat them.
No convenience buying can help you attain ideal food budget
Impulsive and quick buying can severely disrupt your daily food budget. Try to avoid drive-through orders and last-minute food delivery. You may not realize at the moment, but it can cost you extra dollars. Make sure to keep some snacks like chips and biscuits in your car. So, that the next time when you feel hungry while on way to home or work, you can easily satisfy the hunger pangs in low cost.
Pick the right meal to to keep restaurant food costs in control
- Well, having a lunch dish for dinner is what we call "Linner". The difference in the portion sizes of lunch and dinner is minor. While the portion sizes of lunch is slightly smaller than that of dinner, there is a vast difference in the pricing. Total cost of the lunch dishes would be quite less than that of dinner. So, next time you go on a dinner, order a lunch dish.
- If your restaurant doesn't allow you to order a lunch menu item for dinner then go for a lunch next time. Because, dinners can be considerably expensive.
- Brunch, we all know, is a combo of breakfast and lunch. If you dine out on only once a week, make sure you go for brunch. It is the cheapest and you get a mix of two meals at the price of one. Avoid bottomless brunch though, because the unlimited alcohol can make it quite an expensive meal. Similarly, avoid buffets, as they are not as cheap as they might seem.
- If you eat dinners outside more than once a week and prefer alcohol every time, try looking for a BYOB restaurantBring Your Own Bottle. Wine can easily add $12 or more to your bill, costing the entire meal atleast 35 to 40 dollars. While bringing your own booze can cost you significantly less. And do not forget, upscale restaurants even charge to uncork your bottle. Uncorking, lone, can cost you upto $10.
- Combo meals and value meals can save you a lot of money. Plus their portion sizes are decent . So you can get a filling and cheap meal and absolutely zero food waste .
- If you are one who likes to dine out multiple times a week, then mark Quick service restaurants as your best friends. That's because their menu price is economical compared to full service restaurants. Also, quick service restaurants usually serve foods like burger, tacos. They are well stuffed and therefore filling.
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Frequently Asked Questions
What is the average food cost for a restaurant?
If you're starting a restaurant, you'll need to know how much it will cost to run your business. The average food cost for a restaurant is $6.46 per customer. That includes the cost of all ingredients and labor. For example, let's say you want to make a sandwich with bologna, lettuce, tomato, and mayonnaise on white bread with bacon. You'll need 13 slices of white bread and 4 slices of bologna and 2 slices of bacon. So that would come out to $1.39. If you're serving French fries, the total cost would be $0.85 for 5 pounds of potatoes (enough for 60 servings).
How do you calculate food cost in a restaurant?
When you go out to eat, how much does that meal cost? If you are doing the math in your head, you may be thinking about the total price of the food and beverages. But, what about the other costs associated with running a restaurant? Taking into account taxes, labor costs, rent, and more can be time-consuming and hard to keep track of. If you don't want to use a calculator every time you go out for dinner, here's how to calculate food cost in a restaurant.
What is ideal food cost?
Food costs are high. The cost of food is rising and the most common metric for costing food is price per unit. However, one does not always know what to expect when it comes to food cost, which makes it hard for people to plan their budgets. The ideal food cost model includes a number of factors such as shelf life, weight, and nutritional value in order to make an accurate estimate of what foods should cost. This study will explore the ideal cost of various foods and how they compare with the actual average costs of these foods in Canada.