How to calculate food cost percentage
Full books every night and still no money at the end of the month? Very often the menu prices were set once and the ingredient costs kept rising. Food cost percentage is how you catch that before it eats your margin.
Food cost percentage tells you how much of every pound you take at the till goes back out on ingredients. There are two versions, one for a single dish, one for a trading period, and kitchens need both.
The dish formula
Food cost % = (dish ingredient cost ÷ selling price excluding VAT) × 100
Worked example
A beer-battered haddock with chips and peas:
| Ingredient | Quantity | Cost |
|---|---|---|
| Haddock fillet | 180g | £3.06 |
| Chipping potatoes | 300g | £0.42 |
| Batter, oil, peas, garnish | — | £1.32 |
| Total dish cost | £4.80 |
Menu price is £18.00 including VAT at 20%, so the ex-VAT selling price is £18.00 ÷ 1.2 = £15.00.
Food cost % = (4.80 ÷ 15.00) × 100 = 32%. Gross profit is £10.20 a plate, a GP% of 68%.
The period formula
Food cost % = (opening stock + purchases − closing stock) ÷ food sales × 100
If you open the month with £4,200 of stock, buy £11,500, close with £3,900, and take £38,000 in food sales ex VAT: (4,200 + 11,500 − 3,900) ÷ 38,000 × 100 = 31%.
The gap between your dish figure and your period figure is waste, over-portioning, staff food and theft. If your recipes say 28% and your stocktake says 36%, the recipes are not the problem.
UK targets by venue type
| Venue | Typical food cost % |
|---|---|
| Café / coffee shop | 25–30% |
| Gastropub | 28–33% |
| Casual dining | 28–35% |
| Steak / fine dining | 33–40% |
Four mistakes that skew the number
- Using the VAT-inclusive price. It makes food cost look several points better than it is.
- Ignoring yield. A whole fish costs more per usable gram than the invoice suggests once you account for trim.
- Costing on old prices. A costing built a year ago is a work of fiction today.
- Forgetting the garnish. Oil, seasoning, sauce and garnish routinely add 10–15% to a dish cost.
Doing it without a spreadsheet
Chef’s Helper totals the ingredient costs entered on a recipe, divides the batch by its yield and compares the per-portion cost with the selling price. When an invoice changes, update the affected recipe costs to see the revised GP% before reviewing the menu price.
You can update ingredient prices and check dish margins at the pass with the Chef’s Helper Android app, or in your web browser.
Frequently asked questions
What is the food cost percentage formula?
Food cost percentage = (cost of ingredients ÷ selling price excluding VAT) × 100. For a whole period, use (opening stock + purchases − closing stock) ÷ food sales × 100.
What is a good food cost percentage?
Most UK restaurants aim for 25–35%. Wet-led venues and high-volume operations often sit lower; fine dining and steak-led menus often sit higher. The right target is the one that leaves your gross profit covering labour and overheads.
Should food cost percentage include VAT?
No. Always use the selling price excluding VAT, otherwise the percentage flatters itself and you will price too low.