Wednesday, November 4, 2026 · For people who sign the checks Calculators · About
Menu & Margin
Open a restaurant and improve how it runs—checklists, operations tools, and free calculators for independent owners

By Menu & Margin editorial team · Published · Updated

Calculator

Food Cost Percentage

Calculate what percentage of food sales goes toward ingredients for the same period. Compare against your own last four closed weeks—not a generic industry round number.

The dollar value of food inventory at the start of the period
Total food and beverage purchases during the period
The dollar value of food inventory at the end of the period
Total food and beverage sales during the period

How to Calculate Food Cost Percentage

The food cost percentage formula is:

Food Cost % = (COGS / Food Revenue) × 100

Where Cost of Goods Sold (COGS) is calculated as:

COGS = Beginning Inventory + Purchases - Ending Inventory

Worked example

Beginning inventory $5,000 + purchases $10,000 − ending inventory $4,500 = COGS $10,500. Food revenue $35,000 → food cost % = 10,500 ÷ 35,000 × 100 = 30.0%. Compare that figure to your prior closed weeks, not an unsourced “industry average.”

How to read the result

We do not publish unsourced “industry standard” percentage bands here. Set a target from your concept, pricing, and recent actuals; investigate week-over-week spikes with waste tags, invoice prices, and portion checks. See Running better → Food cost.

Tips to Reduce Food Cost

  1. Track inventory regularly: Weekly counts help identify waste and theft
  2. Standardize recipes: Ensure consistent portioning across all dishes
  3. Negotiate with suppliers: Compare pricing and consolidate orders
  4. Reduce waste: Proper storage, FIFO rotation, and careful prep
  5. Menu engineering: Promote high-margin items
  6. Monitor variance: Compare theoretical vs. actual food usage
  7. Use inventory software: See our inventory software comparison