What is food cost percentage?

Picture a burger that sells for £12. The bun, the beef, the cheese and the sauce cost you £3.60. That burger has a food cost of 30%: for every pound it brings in, 30p went on ingredients. Food cost percentage is that same sum, for one dish or for the whole kitchen.

The formula

For one dish, divide what its ingredients cost by its selling price before VAT:

Food cost % = ingredient cost ÷ selling price (ex VAT) × 100

For a week or a month, use what the kitchen actually used up — the stock you started with, plus what you bought, less what is left:

Food cost % = (opening stock + purchases − closing stock) ÷ food sales (ex VAT) × 100

A worked example

You open the week with £1,800 of food stock, buy £2,400 more, and count £1,500 left on Sunday night. You used £2,700 of food. Food sales for the week were £9,000 before VAT.

£2,700 ÷ £9,000 = 30%.

What is a good food cost?

There is no single right number — a coffee shop and a steakhouse live in different worlds. Many restaurants aim for somewhere around 25–35%. What matters more is your own number moving: a jump of three or four points from one month to the next is money leaving through waste, over-portioning, theft or a supplier price rise.

Why it matters

• It tells you whether your prices still cover your ingredients after a supplier puts theirs up.
• It is the quickest way to spot waste and over-portioning — the dish costs the same on paper, but the kitchen uses more.
• Together with labour, it makes up prime cost, the biggest cost a restaurant controls.

Common mistakes

1. Including VAT in the price. A £6 dish with 20% VAT brings you £5. Work from £5, or every food cost looks better than it is.
2. Costing a recipe once and forgetting it. Ingredient prices move; the recipe card has to move with them.
3. Ignoring waste. A theoretical food cost that leaves out wastage will always be lower than the real one.
4. Skipping the stocktake. Without a closing count, the period formula is a guess. See stocktake.

Tracking it in DUMA

Add a recipe to each menu item and DUMA works out the cost of every dish from its ingredients, and its margin with VAT taken out of the price when you are VAT-registered. The Prime cost report shows food and labour as a share of sales over any period, and Stock usage shows what was used, item by item.