Food Cost Percentage
Also called: food cost %, food cost ratio
What is Food Cost Percentage?
Food cost percentage is the cost of the ingredients used, expressed as a percentage of food sales. It is the single most watched number in a kitchen because it moves daily with purchase prices, portioning and waste.
Why Food Cost Percentage matters
A few points of food cost is usually the whole difference between a profitable restaurant and a struggling one. On ₹10 lakh of monthly food sales, three points is ₹30,000 of margin lost or found.
Food Cost Percentage formula
Food cost % = Cost of food used ÷ Food sales × 100
Cost of food used is opening stock plus purchases minus closing stock.
How Food Cost Percentage works in practice
Measure it from stock movement rather than from purchases, and run it weekly on high-value categories. A rising percentage with stable recipes points at portioning, wastage or theft rather than at the menu.
Worked example
₹2,90,000 of food used against ₹9,00,000 of food sales is a food cost of 32.2%.
Common mistakes with Food Cost Percentage
- Using purchases instead of stock consumed, which swings wildly month to month.
- Including beverages in food sales, which understates the true food figure.
- Never counting stock, so the percentage is an estimate dressed as a measurement.
Frequently asked questions
Most full-service Indian restaurants target the high twenties to mid thirties, but the right number depends on your menu, format and pricing.