The cost of the food plays a big role in how successful a restaurant is. Understanding your restaurant’s food expenses can help you set menu prices, keep tabs on your prime costs, and achieve your profit goals.
With all the restaurant sector faces, including inflation, supply chain issues, and labour difficulties, managing food costs is crucial.
Although it can be difficult, cost control in restaurants doesn’t have to be. It takes a lot of time and effort to manually calculate food costs, but it must be done frequently to ensure that expenses appropriately reflect shifting market rates.
Continue reading to discover how to manage food expenses without investing several hours each week in spreadsheets.
How much do meals cost at your restaurant?
A restaurant’s food cost is, at its most basic level, the sum of all its food costs. Finding that cost is a little trickier than that, though.
When restaurants discuss the price of food, they typically refer to two categories:
period price
Period expenses are the overall cost of food over a predetermined time frame, such as a week, month, or year. You must utilise the cost of goods sold (COGS) ratio to determine period cost. Period costs provide you with a quick picture of your health.
Plate price
Before margins are included, a dish’s plate expenses are its entire cost. Recipe costing, the act of standardising your recipes and figuring out their cost per serving, is where the calculation of plate cost begins. The plate cost is then calculated by adding the portion costs for each recipe on the dish, as well as any standalone items like proteins.
What percentage of your restaurant’s costs are for food?
Instead of using exact numbers, most restaurant owners will use percentages to represent food prices. This is referred to as the food cost % of a restaurant.
It is computed by dividing the overall costs for a given time by the total sales for that same period (for example, the period cost) or by dividing the cost price of a menu item by the sales price (for example, the plate cost), then multiplying the resulting ratio by 100.
What percentage of your restaurant’s costs are for food?
Instead of using exact numbers, most restaurant owners will use percentages to represent food prices. This is referred to as the food cost % of a restaurant.
It is computed by dividing the overall costs for a given time by the total sales for that same period (for example, the period cost) or by dividing the cost price of a menu item by the sales price (for example, the plate cost), then multiplying the resulting ratio by 100.
