Food cost percentage is a fundamental metric for restaurant profitability. Learn how to calculate it, understand industry standards, and discover proven strategies to optimize your food costs without sacrificing quality.
Food Cost Percentage Formula
(Cost of Goods Sold / Total Food Revenue) × 100 = Food Cost %
What’s a Good Food Cost Percentage?
Industry standard is 28-35% for most restaurants. Fine dining may run 25-30%, while quick service can be 20-25%.
How to Lower Food Costs
1. Negotiate with suppliers
2. Reduce food waste
3. Optimize menu pricing
4. Track inventory accurately
5. Seasonal menu planning
Food Cost Tracking Tools
Use Excel spreadsheets, POS systems, or specialized restaurant KPI software to track and monitor food costs regularly.