The short version
Aim for 28-35% food cost in 2025. Fix high costs by tracking inventory weekly, enforcing portions, cutting waste, and updating prices quarterly. Start with a quick audit to spot the biggest leaks.
The real math: food cost breakdown
Your food cost % = (Beginning inventory + Purchases - Ending inventory) / Sales * 100. Track it weekly to catch issues early.
- Inventory: Weekly counts prevent overbuying and theft.
- Purchases: Negotiate with vendors for better deals.
- Waste: Log spoilage and overportions—aim under 5%.
- Sales: Mix affects %; push high-margin items.
Example: $10k sales, $3k COGS = 30%. If waste adds $500, it jumps to 35%—that's $500 lost profit.
Target: 28-32% for full-service, 25-30% for QSR. Adjust for your concept.
Factors that drive up food costs in 2025
Inflation hits hard, but internal leaks hurt more:
1. Waste and spoilage
- Overprepping: 10-20% of food thrown out daily.
- Poor storage: FIFO ignored, leading to rot.
- Employee meals/comp: Untracked "freebies" add up.
2. Portion creep
- Extra scoops: Cooks eyeballing instead of measuring.
- Upsize culture: "Make it look good" inflates costs.
3. Vendor and supply issues
- Price hikes: Up 5-15% on staples like beef/produce.
- Overordering: No par levels = excess inventory.
- Theft: Internal or delivery shorts.
4. Menu and operations
- Low-margin items: Stars that sell but kill %.
- Inefficient recipes: High-cost ingredients unused.
- Delivery/packaging: Adds 10-20% to third-party orders.
Quick food cost audit
Spot fixes in under an hour:
Step 1: Calculate current %
- Pull last week's inventory, purchases, sales.
- Use our Food Cost Calculator for accuracy.
Step 2: Check variance
- Compare theoretical (recipes) vs. actual usage.
- Over 2-3%? Look for waste or theft.
Step 3: Review processes
- Portions measured? Inventory weekly?
- Vendors competitive? Menu priced right?
How to fix food costs without losing customers
Cuts don't mean skimping—focus on efficiency:
- Standardize recipes. Cost cards for every dish—lock in portions.
- Train staff. Waste logs and portion tools build habits.
- Menu engineer. Axe low-margin dogs, promote stars.
- Price smart. Small hikes (5-10%) with value adds like bundles.
- Tech up. Inventory apps catch issues real-time.
Start with our templates like the Waste Log to track and trim without menu changes.
Where the RPS tools plug in
Fixing one week is easy. Keeping costs low year-round? Our tools automate it:
- Food Cost Calculator: Run weekly % with inventory inputs.
- Inventory Spreadsheet: Track stock, set pars, flag variances.
- Menu Engineering Matrix: Spot high-cost items dragging your %.
- Live Menu Engine service: Auto-updates prices as ingredient costs rise.
If you’re comparing DIY spreadsheets and live tracking to the big all-in-one restaurant platforms, our Us vs Them page breaks down why Restaurant Profit Systems is different.
Simple next step for this week
Do a quick inventory count. Calculate your %—if over 35%, log waste for 3 days and portion-check top sellers. Tweak one menu item.
FAQs
What is food cost?
The percent of sales spent on ingredients.
Why does food cost increase?
Waste, portion creep, vendor price changes.
How do I control food cost?
Track recipes, portions, and update menu prices.