How to calculate food cost percentage, and what the number hides
The standard formula, a worked example, and the four things a single monthly percentage cannot tell you.
Food cost percentage is the share of food sales that went to buying the food. It is the first number most owners ask for, and the one most kitchens can only produce once a month.
The formula
Food cost % = (Opening inventory + Purchases − Closing inventory) ÷ Food sales × 100The part in brackets is your cost of goods sold for food: what you had at the start, plus what came in, minus what is still on the shelf.
A worked example
A restaurant closes October with these figures:
| Item | Amount |
|---|---|
| Opening inventory, 1 October | $18,400 |
| Food purchases in October | $41,250 |
| Closing inventory, 31 October | $16,900 |
| Food sales in October | $142,000 |
Cost of goods sold is $18,400 + $41,250 − $16,900 = $42,750. Divided by $142,000 in food sales, that gives a food cost of 30.1%.
Whether 30.1% is good depends on the concept. Fine dining, steakhouses and seafood often run higher. Pizza and pasta concepts often run lower. The trend matters more than any single month.
What the monthly number hides
1. Which dishes drive it
The percentage is an average across the whole menu. Three dishes on the same menu can look very different:
| Dish | Portion cost | Menu price | Food cost |
|---|---|---|---|
| Spaghetti carbonara | $3.55 | $13.00 | 27.3% |
| Ribeye, 300 g | $14.80 | $38.00 | 38.9% |
| Caesar salad | $2.10 | $11.00 | 19.1% |
If ribeye sales double next month, food cost goes up even if nothing is wasted. That is a menu mix effect, not a kitchen problem.
2. Where the food went
The formula counts everything that left the shelf: dishes sold, but also staff meals, comps, tastings, spoilage and theft. A good month and a leaky month can produce the same number.
3. Timing
An invoice booked in the wrong month, or a large delivery that arrives on the 31st, moves the percentage without anything changing in the kitchen.
4. Transfers
In groups, stock borrowed from another location often travels without paperwork. One site looks better than it is, the other worse.
Getting more from the number
- Count on the same day and at the same time every period, before deliveries.
- Record transfers, staff meals and waste as they happen, not at month-end.
- Compare against theoretical food cost, the cost your recipes say you should have had. The gap between the two is where the money goes.
Alacena calculates both every day from your invoices, recipes and point-of-sale data, so the number arrives while you can still act on it.