The following is a step-by-step method for calculating food cost including an example and a worksheet to figure your own food cost. With an accurate food cost, steps can be taken to improve the operation and ultimately help your savings and improve the bottom line. Then the ratio can be compared to industry averages and previous performance. To be useful, food cost percentages must be determined accurately.
RESTAURANT INVENTORY MANAGEMENT APP CHEF SHEET VS. FOR FREE
Sign-up for free and get the very next issue.ĭespite its importance, we find many restaurant managers do not calculate food cost correctly, or if they do, they do not fully understand the process. Beyond the bottom line, food cost also reflects an operation's food quality, value provided to the customer, and management skill level.įree Newsletter - Restaurant Marketing, Operations, Service & People Tips. Because of the impact food cost makes on an operation, food cost is one of the first things we examine at a troubled property. Coupled with labor costs, these expenses consume 50%-75% of total sales.
A profitable restaurant typically generates a 28%-35% food cost. A vital ratio - key to the success of any restaurant as it directly impacts profitability. The food is great, the service fabulous and the restaurant is busier than ever - but are you wondering why the bottom line isn't all it should be?Ĭheck your FOOD COST. Inventory Your Food Cost! by Ron Gorodesky and Kate Lange
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Restaurant Accounting: For Profit's Sake,