Restaurant inventory management: a simple UK system

Restaurant inventory management means knowing what stock you have, what you've used and what it cost. For most small UK kitchens, that's a weekly stock-take, par levels for ordering, first in first out (FIFO) storage and a waste log. Then work out your food cost: (opening stock + purchases − closing stock) ÷ food sales ex VAT. Aim to keep it close to what your recipes say it should be.

The 6-part system

1. Build a stock list of every item you buy, with unit, pack size and cost.
2. Count on a schedule. Full count weekly. High-value items daily.
3. Work out food cost % each week from the count.
4. Compare actual with theoretical cost from your recipes, and look at the gap.
5. Order to par levels, not by eye.
6. Store FIFO and log waste, so you can see where money goes.

1. Build your stock list

List items in the order they sit on your shelves: walk-in, freezer, dry store, bar, packaging. That way, counting is a walk, not a hunt.

For each item, record:

• Name and supplier (and the supplier's product code)
• Count unit (kg, litre, each, bottle, case)
• Pack size and pack cost (ex VAT if you're VAT-registered)
• Unit cost (pack cost ÷ pack size)
• Allergens, from the supplier's spec sheet

2. How to do a stock-take

• Same day, same time. Most kitchens count after close on Sunday or before deliveries on Monday.
• Two people if you can: one counts, one writes.
• Count in the shelf order of your list.
• Count part-used packs to the nearest sensible unit (half a bag, a quarter of a tub).
• Don't count stock you've already sold (for example, a prepped dish already ticketed for an order).
• Value it: quantity × unit cost.

Do a full count at your financial year end too. Your accountant needs closing stock for the accounts. Limited companies must keep records of stock held at year end and the stocktakes used to work it out (GOV.UK).

3. Work out food cost %

Food cost % = (opening stock + purchases − closing stock) ÷ food sales ex VAT.

Worked example: one month in a 50-cover restaurant

Always use sales without VAT. If you divide by sales including VAT, your food cost will look better than it is. Our GP calculator explains why.

4. Find the gap: actual vs theoretical

Your theoretical food cost is what your recipes say it should be, based on what you sold. Cost each dish with the recipe cost calculator, then multiply by your sales mix from the till.

Say your recipes give a theoretical cost of 27%. Actual was 29.7%. The 2.7-point gap on £30,000 of sales is £810 a month you can't account for.

Common reasons:

• Portions creeping up
• Waste not recorded (burnt, dropped, out of date)
• Staff food not logged
• Price rises from suppliers not updated in recipes
• Wrong counts or invoices missing
• Theft (rare, but it happens)

Track the gap every week. A sudden jump tells you where to look.

5. Order to par levels

A par level is the stock you want on the shelf after each delivery. Par = daily usage × days between deliveries + a safety buffer. Order the difference between par and what you'll have when the van comes.

Work out pars and an order sheet with our free par level calculator. Review them monthly, and before busy seasons.

When deliveries arrive:

• Check against the order and the invoice. Note shorts and substitutions.
• Check temperatures of chilled and frozen goods.
• Check allergen info on any substitution. A different brand of the same product can contain different allergens. Update your allergen matrix before you serve it, and the dish's allergen tags on your online menu if you have them (Menuthere has allergen and calorie tags on every plan, including Free). See the 14 allergens guide.

6. Store FIFO and log waste

• First in, first out. New stock goes behind old stock. Label prepped food with dates.
• Waste log by item, reason and £ value. Keep it by the bin and fill it every shift.
• Review waste weekly. If the same item keeps getting binned, cut the par, the portion or the dish.

UK rule: in England, workplaces with 10 or more employees must separate food waste for collection since 31 March 2025. Smaller workplaces follow by 31 March 2027 (Simpler Recycling). Cutting waste now also cuts your collection costs.

Free stock-take template

Set up one row per item, in the order you walk round the kitchen. These are the columns to use:

Formulas for a spreadsheet:

• Value = Count × Unit cost.
• Order = Par − Count, rounded up to whole packs (order nothing if the count is above par).
• Closing stock = the total of the Value column.
• Food cost % = (Opening stock + Purchases − Closing stock) ÷ Food sales ex VAT × 100.
• GP % = 100 − Food cost %.

Printable count sheet. Print this page, or copy this blank sheet onto A4, and fill it in on a clipboard:

Counted by: ____________ Date: ____________

Inventory software: do you need it?

Compare options in our restaurant management software guide.

Keep your menu in sync with your stock

Running out is bad. Taking an order for a dish you can't make is worse, especially online.

With Menuthere, you can mark a dish, a single size or a whole category as sold out in one tap. Customers can't order it from your online or QR menu until you switch it back on. Keep your weekly stock-take and par levels alongside it.

Stop selling dishes you've run out of. 0% commission, free QR codes.

Create your free ordering page