1. What is Food Cost Percentage?

Food Cost Percentage is a key metric in the restaurant industry that shows what percentage of your sales revenue is spent on food ingredients. It helps determine pricing strategies and profitability.

2. How Does the Calculator Work?

The calculator uses the food cost percentage formula:

Where:

• \( food\_cost \) — Total cost of food ingredients ($)
• \( sales \) — Total revenue from food sales ($)

Explanation: The formula calculates what portion of your sales is spent on food ingredients, expressed as a percentage.

3. Importance of Food Cost Calculation

Details: Maintaining an optimal food cost percentage (typically 25-35%) is crucial for restaurant profitability. It helps in menu pricing, cost control, and identifying potential waste or theft.

4. Using the Calculator

Tips: Enter your total food cost and total sales in dollars. Both values must be positive numbers. The calculator will show your food cost percentage.

5. Frequently Asked Questions (FAQ)

Q1: What is a good food cost percentage?
A: Most restaurants aim for 25-35%, but this varies by concept. Fine dining may have higher percentages while fast food has lower.

Q2: How often should I calculate food cost?
A: Ideally weekly or at least monthly to catch problems early and adjust purchasing/pricing.

Q3: Does this include labor or other costs?
A: No, this is strictly food cost percentage. Prime cost includes both food and labor.

Q4: Why is my food cost percentage high?
A: Possible causes include underpricing, waste, theft, incorrect portioning, or rising ingredient costs.

Q5: How can I improve my food cost percentage?
A: Strategies include menu engineering, portion control, waste reduction, supplier negotiation, and price adjustments.