How to Calculate Food Cost Percentage (With Examples)
Food cost percentage is the most-tracked number in restaurant finance. Here's exactly how to calculate it, what a healthy range looks like, and the five most common reasons it runs too high.
The Food Cost Percentage Formula
Food cost percentage answers a simple question: for every dollar of food you sell, how much did the food itself cost you?
Both numbers need to cover the same time period — a week, a month, or a period. Mixing a monthly COGS figure with weekly sales will give you a meaningless result.
Step-by-Step Calculation
Step 1 — Calculate your COGS
Cost of goods sold isn't just what you purchased. It's the cost of the inventory you actually used:
If you started the week with AED 8,000 of food in stock, bought AED 5,000 more, and ended with AED 6,500, your COGS for the week is AED 6,500.
Step 2 — Get your food sales
Pull total food revenue from your POS for the same period. If your POS doesn't separate food and beverage sales, you'll need to split them — otherwise your food cost percentage will look artificially low because it's being diluted by beverage revenue (which usually carries a much lower cost).
Step 3 — Divide and multiply
COGS: AED 6,500
Food Sales: AED 21,000
Food Cost %: (6,500 ÷ 21,000) × 100 = 31.0%
This means for every AED 1 of food sold, AED 0.31 went to the cost of the food itself.
Skip the math — plug your numbers into our calculator and get your food cost % with a health check instantly.
Open Food Cost Calculator →What Is a Good Food Cost Percentage?
There's no single "right" number — it depends on your concept, menu mix, and pricing strategy. But here are typical ranges that most operators use as a starting point:
Quick-service / fast casual: 25–30%. Simpler menus, lower ingredient costs, and high throughput keep this number tight.
Full-service / casual dining: 28–35%. The most common target range. Most chain restaurants benchmark at 30–32%.
Fine dining: 33–40%. Premium ingredients and smaller covers push food cost up, but this is offset by higher check averages and beverage margins.
Pizza / bakery: 24–28%. Flour-based menus carry lower raw material costs.
The number that matters most isn't the absolute percentage — it's the trend. A 33% food cost that's been stable for six months is better than a 29% that's been climbing by half a point every period.
5 Common Reasons Your Food Cost Is Too High
1. Portion drift
Cooks free-pouring sauces, over-portioning proteins, or adding extra toppings without being aware of the cost impact. This is the most common and most fixable cause. Recipe cards with gram weights, portioning scoops, and periodic line checks solve it.
2. Waste and spoilage
Food that gets thrown away still shows up in your COGS. If you don't have a waste log, you don't know how much you're losing. Most restaurants that start tracking waste find they're losing 2–5% of purchases to spoilage alone.
3. Untracked supplier price increases
Suppliers raise prices. Sometimes they notify you, sometimes the price change is on the invoice and nobody catches it. If your menu prices don't move to match, your food cost % silently creeps up. Review your top 10 items by spend monthly.
4. Theft and unrecorded consumption
Staff meals, comps, tasting, and outright theft all consume inventory without generating sales. The food cost formula doesn't know the difference — it just sees COGS going up without matching revenue.
5. Menu mix shift
If your best-selling items change from low-cost dishes to high-cost dishes — or if a promotion pushes volume to a high-cost item — your blended food cost moves even though nothing else changed. Menu engineering analysis helps you spot this.
Food Cost Percentage vs. Plate Cost
Food cost percentage is an aggregate, backward-looking number — it tells you what happened across the whole menu over a period. Plate cost is forward-looking and per-dish — it tells you what a single dish should cost based on its recipe.
You need both. Plate costing is how you set prices. Food cost percentage is how you check whether reality matched the plan. If your theoretical food cost (based on plate costs and sales mix) is 29% but your actual food cost is 34%, the gap is waste, theft, portion drift, or untracked price changes.
Need to cost out individual dishes? Use our recipe costing calculator.
Open Recipe Costing Calculator →How Often Should You Calculate Food Cost?
Weekly is the standard for most multi-unit operators. Monthly is the minimum. Daily is unnecessary for most restaurants unless you're troubleshooting a specific problem. The key is consistency — pick a cadence and stick to it, always using the same method for counting inventory and pulling sales data.