Food cost percentage: how to work it out and what is normal

Food cost is the biggest cost that moves with every plate you sell. Knowing it per dish, and checking it every month, is the quickest way to find lost profit.

The formula

Food cost % = cost of the ingredients ÷ selling price × 100. Use the selling price before GST.

A paneer tikka sells for ₹280. The paneer, marinade, oil, onion and garnish for one portion cost ₹84. Food cost = 84 ÷ 280 × 100 = 30%. Work out your own dishes, and the price a target percentage gives you, in the food cost calculator.

For the whole month

Per-dish numbers are what should happen. The month shows what did happen, including waste, staff meals and anything that went missing:

Monthly food cost % = (opening stock + purchases − closing stock) ÷ food sales × 100.

Count the store on the same day each month. If the monthly figure is several points above your per-dish figures, the gap is waste, over-portioning, wrong recipes or theft, and it is worth finding.

What is normal

Many restaurants in India run between 25% and 35%. Where you should be depends on what you sell:

• Lower (20–28%): beverages, coffee, breads, rice and dal-based dishes, desserts made in-house.
• Middle (28–35%): most North Indian, Chinese and café menus.
• Higher (35%+): seafood, mutton, imported cheese, fine dining with expensive produce.

A higher food cost can still be fine if your rent and staff costs are low. Look at it together with the rest of the month in the profit and break-even calculator.

Seven ways to bring it down

1. Write a recipe card for every dish, with grams, and train the kitchen on it. Portions drift when nobody measures.
2. Re-cost the menu when prices move. Onion, tomato, oil and paneer change every few weeks; a dish that was 30% in spring can be 38% now.
3. Count daily the 10 costliest items (paneer, chicken, mutton, cheese, oil) and compare with what was sold.
4. Buy against a par level, not by habit, so less goes bad.
5. Use the whole ingredient: trimmings into gravy, stock or staff meals.
6. Push the dishes that earn most. Put them first on the menu, train staff to suggest them.
7. Price delivery separately. App commission makes a 30% dish feel like a 45% dish; see what the apps really cost.

RestroSimplify shows what sold, dish by dish, every day, and keeps a daily stock count for the items you choose, so the comparison is a few taps instead of an evening with a notebook.