How to calculate food cost percentage
The formula, a worked example, a healthy target, and how to bring it down.
The formula
Food cost percentage = cost of goods sold ÷ food sales, over the same period. If you spent $9,000 on food and sold $30,000 of food, your food cost is 30%. Measure it over a full period (a week or a month), not a single day, so deliveries and prep even out.
A worked example
Say a plate uses $4.20 of ingredients and sells for $16. Its plate cost is 4.20 ÷ 16 = 26.25%. Do this across the menu, weight by how often each item sells, and you get your theoretical food cost — the number your actual cost should track close to.
What’s a healthy target?
Most full-service restaurants aim for roughly 28–35%, bars run lower on the beverage side, and QSR varies by concept. The target matters less than the trend: a stable number you understand beats a “good” number you can’t explain.
How to bring it down
Track supplier prices so you catch increases before they hit the plate; cost every recipe and re-cost it when prices move; watch waste, over-portioning and comps; and reconcile what you bought against what you sold each period so a gap can’t hide.
PULSE reads your supplier invoices with AI, matches each line to your ingredients, and updates recipe cost as prices move — then tracks food & beverage spend against a budget tied to projected sales, so drift is flagged the moment it starts, not 30 days later.