Food Cost Percentage (Restaurants)
Short answer
Food cost is the cost of ingredients as a percentage of food sales — the single most important number in restaurant economics.
Formula
Food Cost (%) = Cost of Food Sold / Food Sales × 100
Take the cost of the food you used during the period, divide by food sales (not total revenue), multiply by 100.
Why it matters
Food cost is the largest controllable expense in a restaurant. Industry-leading restaurants target ~28–32%. Anything above 35% and you're either pricing too low, wasting too much, or stealing from yourself.
Benchmarks
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Common questions about Food Cost Percentage (Restaurants)
What is Food Cost Percentage (Restaurants)?+
Food cost is the cost of ingredients as a percentage of food sales — the single most important number in restaurant economics.
How is Food Cost Percentage (Restaurants) calculated?+
Take the cost of the food you used during the period, divide by food sales (not total revenue), multiply by 100.
What is a good Food Cost Percentage (Restaurants)?+
A healthy food cost percentage (restaurants) is typically around < 28% — industry-leading. Specific targets vary by industry and stage; check our benchmarks above for your sector.
Why does Food Cost Percentage (Restaurants) matter?+
Food cost is the largest controllable expense in a restaurant. Industry-leading restaurants target ~28–32%.
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Related concepts
Where this matters most
See Food Cost Percentage (Restaurants) in the context of restaurants & food service.
Industry-specific benchmarks, common pitfalls, and what lenders look for in this sector.