How to calculate food cost percentage
Food cost percentage tells you how much of each sales dollar goes to ingredients. It's simple to calculate and one of the most useful numbers in your restaurant.
Costs & profit · 5 min read
The formula
Food cost percentage = (cost of ingredients ÷ sales) × 100. You can calculate it for a single dish or for a whole period using your total food purchases and sales.
Example — a single dish
Say a burger costs you 3.00 in ingredients and you sell it for 10.00. Food cost percentage = (3.00 ÷ 10.00) × 100 = 30%. That means 30% of the burger's price covers ingredients, leaving 70% toward labor, overhead, and profit.
Example — a whole period
For a period, use: (beginning inventory + purchases − ending inventory) ÷ food sales × 100. If you started with 5,000 of stock, bought 8,000, ended with 4,000, and sold 30,000 in food, your cost of goods used is 9,000, so food cost % = (9,000 ÷ 30,000) × 100 = 30%.
Using it to price
To price from a target food cost, divide the dish cost by your target percentage. A dish costing 4.00 with a 30% target should sell for about 13.30 (4.00 ÷ 0.30). Always sanity-check against what the market and your guests will bear.
Key takeaways
The short version
- Food cost % = (ingredient cost ÷ sales) × 100
- For a period, use beginning + purchases − ending inventory
- Price a dish as cost ÷ target food-cost percentage
- Always sanity-check prices against the market
- Track it over time, not just once
FAQ
Questions, answered
Cost of ingredients divided by sales, times 100. For a period, use beginning inventory plus purchases minus ending inventory, divided by food sales.
Divide the dish's ingredient cost by your target percentage. A 4.00 dish at a 30% target prices around 13.30.
No. Aim for a healthy blended average; some dishes run higher, some lower. Menu engineering helps balance the mix.
Put it into practice
Menulisa brings ordering, POS, kitchen, inventory, and reporting together so the ideas in this guide are easy to act on.