Cost control
How to Calculate Food Cost Percentage (With a Worked Example)
· 5 min read
Food cost percentage tells you how much of every rupee of sales goes into ingredients. It is the fastest way to see whether your menu prices and your kitchen habits are protecting your margin.
The two formulas
Overall food cost % = (opening stock + purchases - closing stock) / food sales x 100. Use it for a week or month to see the big picture.
Dish food cost % = cost of ingredients for one portion / selling price x 100. Use it to price and review individual items.
A worked example
Say a paneer tikka portion uses 120 g paneer at Rs 360 per kg (Rs 43.20), marinade and spices worth Rs 9, and garnish and packing worth Rs 4. Ingredient cost per portion is Rs 56.20.
If you sell it at Rs 220, food cost is 56.20 / 220 = about 25.5%. If you sell it at Rs 160, it is 35.1%, so the same plate eats far more of your margin.
What target should you aim for?
Many restaurants aim somewhere around 28% to 35% for food, but the right number depends on your format, rent and wastage. Use it as a starting point, then set your own target per category and watch the dishes that drift above it.
Why costs drift
Ingredient prices move, portions creep up and waste goes unrecorded. Recipes with live ingredient prices, a waste log and stock deducted automatically from every sale make these leaks visible instead of surprising you at month end.
- Update ingredient prices when you buy
- Weigh portions on the busiest items
- Log waste and spoilage with reasons
- Review the five highest-selling dishes monthly
Run your restaurant on one system
GST billing, KOTs, inventory and reports from Rs 1,499 per month.