Food cost percentage is the share of a menu item’s selling price — or of total sales — that goes to buying the food itself. It is the single most-watched ingredient number in a kitchen because small leaks (over-portioning, waste, theft, price creep) show up here first. There are two views: the plate cost on one dish, and the period cost across everything you sold in a week or month.
For a single dish:
Food cost % = (cost of ingredients on the plate ÷ menu price) × 100
For a whole period you use cost of goods sold (COGS):
COGS = beginning inventory + purchases − ending inventory
Food cost % = (COGS ÷ food sales) × 100
The period version is the honest one — it captures spoilage, spillage and free staff meals that a tidy recipe card never shows. If your plate math says 28% but your monthly number is 36%, the gap is waste and shrinkage.
| Line | Amount |
|---|---|
| Beginning inventory | $12,000 |
| Purchases during the month | $28,000 |
| Ending inventory | $10,000 |
| COGS (12,000 + 28,000 − 10,000) | $30,000 |
| Food sales for the month | $95,000 |
| Food cost % (30,000 ÷ 95,000) | 31.6% |
Most full-service restaurants target roughly 28-35%, and many operators treat about one-third of the menu price as a working rule of thumb. Ranges vary widely by format: high-volume pizza and pasta concepts can run in the low-to-mid 20s, while steakhouses and raw-bar concepts routinely run 35%+ because the protein is expensive. These are general industry ranges, not guarantees — your own break-even math matters more than any benchmark. A low food cost is not automatically good, either: starving portions to hit 24% can cost you repeat customers.
Your theoretical food cost is what recipes say you should have spent for the items you sold. Your actual food cost comes from counting inventory. The gap between them is your variance, and it is where the money hides — a consistent 3-4 point variance is a signal to look at portioning, waste logs and receiving. Most disciplined operators count key inventory weekly rather than monthly, because a weekly number catches a problem while there is still time to fix the month. Keep beverage cost on its own line, too: liquor, beer and wine run very different percentages from food, and blending them hides which side is leaking.
Food cost is only half the story. Track it alongside labor as your prime cost, and use the cost-to-open calculator when you are still planning the concept.