Food cost percentage is the cost of ingredients as a share of the revenue they generate — the single most-watched number in restaurant operations. Cost of food sold divided by food sales.
The example
$9,000 food cost on $30,000 sales.
| A | B | |
|---|---|---|
| 1 | Item | Value |
| 2 | Food cost | 9000 |
| 3 | Food sales | 30000 → 30% |
The formula
The formula:
How it works
How it works:
- Cost of food sold = beginning inventory + purchases − ending inventory.
- Divide by food sales for the period and format as a percentage.
- Most operators target 28–35% — higher squeezes profit, lower may signal small portions or high prices.
- Track it weekly: spikes flag waste, theft, portion creep, or supplier price increases.
Actual vs theoretical food cost: the formula above is actual cost (from inventory movement). Theoretical cost is what recipes say you should have spent for the items sold. The gap between them — the “variance” — is where waste, over-portioning, and theft hide. Watching both is the pro move.
Try it: interactive demo
Food cost and food sales.
Variations
Cost of food sold
From inventory:
Target food cost $
Budget at a target %:
Per-dish food cost %
One item:
Pitfalls & errors
Use cost of food SOLD. Purchases alone ignore inventory changes — include beginning and ending stock.
Match the period. Cost and sales must cover the same window.
Separate beverage. Track food and beverage cost percentages separately — they differ a lot.
Practice workbook
Frequently asked questions
How do I calculate food cost percentage in Excel?
How do I find cost of food sold?
What's the difference between actual and theoretical food cost?
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