Hospitality glossary · Money and margin
Food cost percentage is the cost of the ingredients divided by the food sales, times 100. It is the other side of gross profit: a 30% food cost means a 70% GP.
In practice
Definitions are easy. What matters is how the thing behaves in a real operation, and where it tends to go wrong.
A dish selling for £15 before VAT with £4.50 of ingredients in it has a 30% food cost. Use prices without VAT, or the figure looks better than it really is. Across a week or a month, the cost is opening stock plus purchases minus closing stock, divided by food sales for the same period. A food GP target of around 65% to 72%, common in the UK, means a food cost of roughly 28% to 35%.
Working it out on the recipe card and never checking it against real stock. The card says 30%, but waste, bigger portions and supplier price rises push the real figure higher. Compare the card with a stocktake each month, and cost the dishes again whenever supplier prices change.
Questions
Something here that doesn’t match what you’re seeing in your own business? That is usually worth a conversation rather than another article.
Food cost percentage is the cost of the ingredients divided by the food sales, times 100. It is the other side of gross profit: a 30% food cost means a 70% GP. A dish selling for £15 before VAT with £4.50 of ingredients in it has a 30% food cost. Use prices without VAT, or the figure looks better than it really is. Across a week or a month, the cost is opening stock plus purchases minus closing stock, divided by food sales for the same period. A food GP target of around 65% to 72%, common in the UK, means a food cost of roughly 28% to 35%.
Working it out on the recipe card and never checking it against real stock. The card says 30%, but waste, bigger portions and supplier price rises push the real figure higher. Compare the card with a stocktake each month, and cost the dishes again whenever supplier prices change.
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