1. What is Food Cost Percentage?

Food Cost Percentage is a key metric in the restaurant industry that measures the ratio of food cost to sales revenue. It helps restaurant owners and managers understand how much of their revenue is being spent on food ingredients and supplies.

2. How Does the Calculator Work?

The calculator uses the food cost percentage formula:

Where:

• Food Cost — Total cost of food ingredients and supplies ($)
• Sales — Total revenue from food sales ($)

Explanation: This calculation shows what percentage of your sales revenue is being consumed by food costs, helping you determine profitability and pricing strategies.

3. Importance of Food Cost Calculation

Details: Monitoring food cost percentage is essential for maintaining profitability, setting menu prices, controlling inventory, and identifying areas for cost reduction in restaurant operations.

4. Using the Calculator

Tips: Enter the total food cost and total sales amounts in dollars. Both values must be positive numbers. The calculator will instantly compute the food cost percentage.

5. Frequently Asked Questions (FAQ)

Q1: What is a good food cost percentage for restaurants?
A: Typically, 28-35% is considered good, but this varies by restaurant type. Fine dining may have higher percentages while fast food usually has lower ones.

Q2: How often should I calculate food cost percentage?
A: Most restaurants calculate it weekly or monthly to track trends and make timely adjustments to pricing and purchasing.

Q3: What costs are included in food cost?
A: All direct costs of food ingredients, including meat, produce, dairy, spices, and any other items used in food preparation.

Q4: How can I reduce my food cost percentage?
A: Strategies include negotiating with suppliers, reducing waste, optimizing portion sizes, and regularly reviewing menu pricing.

Q5: Does this include labor costs?
A: No, food cost percentage only includes the cost of food ingredients. Labor costs and other expenses are calculated separately.