Food cost percentage: the formula, a worked example and what restaurants really run

Food cost percentage is the share of your food sales that you spend on the ingredients. Food cost % = cost of food sold ÷ food sales × 100. If you sold $46,000 of food in a month and the food you used cost $14,900, your food cost is 32.4%. You can measure it for a whole period from your inventory, or for one dish from its recipe. In the National Restaurant Association's survey of more than 900 US restaurants, the median in 2024 was 32.0% of sales for full-service restaurants and 32.4% for limited-service.

What is the food cost percentage formula?

There are two versions, and you need both.

1. For a period (a week or a month), from your inventory:

Food cost % = (opening inventory + purchases − closing inventory) ÷ food sales × 100

• Opening inventory is the value of the food on your shelves, in your coolers and freezers at the start of the period.
• Purchases is every food delivery you received during it.
• Closing inventory is what's left at the end, counted the same way.
• The result above the line is your cost of food sold: what you actually used, including waste, spoilage, staff meals and over-portioning.
• Food sales are before sales tax and tips.

2. For one dish, from its recipe:

Food cost % = plate cost ÷ menu price × 100

This is the "theoretical" food cost: what the dish should cost if every portion is perfect and nothing is wasted. Cost each plate with the recipe cost calculator, then check the whole menu in one table with the food cost calculator.

The gap between the two is the money you lose to waste, portions, theft and errors. If your dishes average 29% on paper and your inventory says 33%, four points of sales are disappearing between the delivery door and the plate.

Worked example: one month at a US restaurant

Illustrative figures for a full-service restaurant, food only (drinks counted separately):

Now compare with the menu. If the recipe cards say the dishes it sold should have cost $13,340 (29% of sales), the $1,560 difference is food that was bought, used and not paid for by a guest. On $46,000 of sales, every point of food cost is $460 a month, or $5,520 a year.

For one dish: a cheeseburger with fries costs $3.50 to plate and sells for $11.99. $3.50 ÷ $11.99 = 29.2%.

What food cost percentage do US restaurants actually run?

The most solid public figures come from the National Restaurant Association's 2025 Restaurant Operations Data Abstract, based on 2024 results from more than 900 US restaurant operators:

What the Association says about these numbers:

• They are medians, not targets. The data "is not intended to represent standards or goals for individual restaurants."
• The full-service share fell partly because menu prices rose faster than food costs, so food became a smaller share of sales. It doesn't mean food got cheaper.
• Other possible reasons it gives: shorter menus that made buying more efficient, and a larger share of off-premises sales.

You'll often see a "28 to 35%" rule of thumb on POS and delivery-app blogs. It's a common starting point, but we found no study behind it, so treat it as a rule of thumb. There are no official figures by concept (pizza, fine dining, cafés) in the free NRA material. Your own trend matters more than any average: track the same number the same way every month.

Food cost works with labor: together they are prime cost. In the same survey, the median limited-service restaurant spent 65 cents of every sales dollar on prime cost. See restaurant profit margins for the rest of the picture.

Why last year's food cost is already wrong

Ingredient prices don't move together. The Consumer Price Index for the 12 months to September 2026:

A brunch menu heavy on coffee and beef got more expensive to run, while egg dishes got cheaper. That's why a single menu-wide price increase rarely fixes food cost. Re-cost dish by dish.

How to lower your food cost percentage

1. Re-cost your top 10 sellers every quarter, with today's supplier prices. Start with the dishes you sell most.
2. Fix portions. Use scales, scoops and plating photos. Over-portioning is the most common gap between recipe and actual food cost.
3. Count inventory the same way every time, on the same day, at the same price, so the trend is real.
4. Order to par. Set par levels so you stop over-buying food that spoils; the par level calculator helps.
5. Track waste. A simple waste sheet by the dish pit shows which prep items get thrown away.
6. Re-price, carefully. Raise dishes whose cost moved, not the whole menu. The menu price calculator gives the price for a target food cost; how to price menu items explains the method.
7. Look at dollars too. A dish with a high percentage can still leave the most money per plate. Don't cut a strong seller only because its percentage looks high.

How to check your food cost, step by step

1. Count opening inventory: value everything on hand on the first day, at what you paid.
2. Add purchases: total every food invoice received during the period.
3. Count closing inventory: value what's left on the last day, the same way.
4. Work out cost of food sold: opening + purchases − closing.
5. Divide by food sales: use sales before sales tax and tips, then multiply by 100.
6. Compare with your recipe costs: the gap is waste, portions and errors to fix.

Food cost is one of three big buckets; see how it fits with labor and overhead in the 30/30/30/10 rule, and check whether the month makes money with the restaurant profit margin calculator.

Delivery-app commission doesn't change your food cost %, but it takes 15% to 30% of each app order on top of it. Orders through your own ordering page skip the commission: Menuthere charges 0% commission on every plan.

Keep the margin your food cost work saves.

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