Enter Your Numbers
Value of food on hand at start of period
Total food purchased during period
Value of food on hand at end of period
Total food revenue during period
Optional — for prime cost and annual savings
Total labor for same period (wages + benefits)
For calculating annual savings potential
How Food Cost Percentage Is Calculated
Food Cost % = (Beginning Inventory + Purchases − Ending Inventory) ÷ Food Sales × 100
This formula calculates the percentage of your food revenue that goes toward purchasing food ingredients. The result tells you how efficiently you are converting food purchases into revenue.
For example, if you start the week with $5,000 in food inventory, purchase $3,000, end the week with $4,500, and generate $12,000 in food sales: ($5,000 + $3,000 - $4,500) / $12,000 × 100 = 29.2%. This is a healthy food cost for most restaurant concepts.
Food Cost Benchmarks by Restaurant Type
| Concept | Target Food Cost | Target Prime Cost |
|---|---|---|
| Fine Dining | 30-38% | 60-68% |
| Full Service | 28-35% | 55-65% |
| Fast Casual | 25-32% | 55-62% |
| Quick Service (QSR) | 25-30% | 55-60% |
| Pizza | 20-28% | 50-60% |
| Coffee Shop | 18-25% | 50-58% |
| Bar / Nightclub | 20-25% | 45-55% |
Frequently Asked Questions
Food cost percentage measures how much of your food revenue goes toward purchasing food ingredients. It is calculated as: (Beginning Inventory + Purchases - Ending Inventory) / Food Sales × 100. Most restaurants should target 28-35%, though the ideal range depends on your concept — fine dining runs 30-38% while pizza and coffee shops can hit 20-28%.
Weekly at minimum. High-volume restaurants benefit from daily tracking. Monthly is too infrequent — problems compound for 30 days before you discover them. Automated POS analytics tools like Meridian calculate food cost in real time, eliminating the need for manual calculation entirely.
Prime cost is food and beverage cost plus total labor cost (wages, benefits, payroll taxes). It is the single most important profitability metric for restaurants, typically accounting for 55-65% of total revenue. If prime cost exceeds 65%, your restaurant will struggle to be profitable regardless of revenue level.
Target food cost by concept: Full service 28-35%, Fast casual 25-32%, QSR 25-30%, Pizza 20-28%, Coffee shops 18-25%, Fine dining 30-38%. The key metric is not food cost alone but prime cost (food + labor), which should stay below 60-65% of revenue.
Common causes: over-portioning (staff serving more than recipes call for), waste and spoilage from poor inventory management, theft or unrecorded consumption, menu prices that haven't kept up with ingredient cost increases, and recipes that were never accurately costed. Start by comparing actual vs. theoretical food cost to find the gap.