Keep food costs between 28-35% of revenue (excluding VAT). Calculate monthly using: (Total purchases / Revenue excl. VAT) × 100. Above 35% means you're overspending on ingredients or dealing with too much waste. Focus on your bestselling dishes first for maximum impact.
It's Monday morning, and you're staring at last month's invoices wondering if you're hemorrhaging money on ingredients. That nagging feeling hits every restaurant owner: are we buying too much, too expensively, or just plain wrong? Here's exactly how to know if your food costs match your revenue.
The basics: food costs vs. revenue ratio
Your ingredient spending should align with what you're bringing in. Most successful restaurants keep their total food purchases between 28% and 35% of revenue.
💡 Example:
Restaurant with €50,000 revenue per month:
- Healthy purchases: €14,000 - €17,500 (28-35%)
- Too high purchases: above €17,500 (>35%)
- Very efficient: below €14,000 (<28%)
Check: €18,000 purchases = 36% - too high!
Calculate your current ratio
The math is straightforward: Food cost percentage = (Total purchases / Revenue excl. VAT) × 100
Critical point: use revenue WITHOUT VAT. Your POS system likely shows VAT-inclusive numbers, so divide by 1.09 for 9% VAT.
💡 Example calculation:
Month of January:
- Revenue from POS system: €54,500 (incl. 9% VAT)
- Revenue excl. VAT: €54,500 / 1.09 = €50,000
- Total ingredient purchases: €16,500
Ratio: (€16,500 / €50,000) × 100 = 33% - great!
Signs that your purchases are too high
These red flags should grab your attention:
- Ratio above 35%: You're likely overpaying for ingredients or dealing with excessive waste
- Rising trend: Each month shows a higher percentage despite steady revenue
- Constant leftovers: Food spoiling regularly before you can use it
- Overstuffed storage: Inventory sitting around for weeks, taking up valuable space
⚠️ Watch out:
A ratio below 25% might signal trouble too. This often means undersized portions, cheap ingredients that hurt quality, or bookkeeping mistakes.
Compare with your type of business
Different restaurant styles have different targets:
- Fine dining: 28-35% (premium ingredients justify higher costs)
- Bistro/brasserie: 25-32% (balancing quality with efficiency)
- Pizzeria: 20-28% (flour, cheese, and tomatoes are relatively cheap)
- Café with kitchen: 25-35% (varies widely based on menu complexity)
What to do if your purchases are too high
If you're hitting above 35%, here's where to focus first:
- Audit your suppliers: Get quotes from competitors, push for volume discounts
- Track your waste: What's ending up in the bin? Can you prevent it?
- Measure portion sizes: Are your cooks being too generous with servings?
- Examine menu profitability: Which dishes are eating into your margins?
I've seen this mistake cost the average restaurant €200-400 per month: owners who track their overall percentage but ignore their highest-volume dishes. You can have perfect ratios on 20 menu items, but if your three bestsellers are bleeding money, your whole operation suffers.
💡 Quick win:
Focus on your 5 most popular dishes:
- Calculate individual food costs for each
- Keep these under 35% and you'll control most of your spending
- Fix these first before worrying about rarely-ordered items
Use digital tools for overview
Manual tracking eats up hours and introduces errors. Digital systems automatically calculate your food cost percentages and highlight which dishes are driving up your expenses.
You get instant visibility into whether your spending matches your revenue, without wrestling with spreadsheets every week.
How do you calculate if your food costs are too high? (step by step)
Gather your figures
Get your revenue figures from last month (from your POS system) and your total ingredient purchases (from your invoices). Make sure both amounts are from the same period.
Calculate your revenue excluding VAT
Divide your revenue by 1.09 (at 9% VAT). For example: €54,500 / 1.09 = €50,000 excl. VAT. This is important for accurate calculation.
Calculate your food cost percentage
Divide your total purchases by your revenue excl. VAT and multiply by 100. For example: (€16,500 / €50,000) × 100 = 33%. This is your food cost percentage.
Compare with the benchmark
Check if your percentage is between 28-35%. Above 35% is usually too high, below 25% can indicate other problems such as portions that are too small.
Analyze the trend
Calculate this for 3-4 months in a row. A rising trend is a warning signal, even if you're still within 35%.
✨ Pro tip
Calculate food costs for your weekend specials separately from regular menu items. Weekend dishes often use premium ingredients but generate higher revenue per table, so they can handle 38-42% food costs while still being profitable.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
What if my food cost percentage jumps around every month?
That's typical because of seasonal pricing and revenue swings. Look at your 3-4 month average instead of monthly snapshots. Watch for consistent upward trends rather than normal fluctuations.
Should I include beverages in my food costs?
No, only count actual food ingredients. Beverages have completely different profit margins and should be tracked separately from kitchen costs.
My percentage is at 37%, but we're profitable. Is that really a problem?
You're leaving money on the table. Even profitable restaurants can improve margins by getting food costs in line. Check if portions are oversized or suppliers are overcharging.
How often should I calculate this ratio?
Monthly minimum, but weekly tracking gives you faster feedback. You'll catch problems with waste or purchasing before they compound into bigger losses.
What if I'm using expensive organic or specialty ingredients?
Premium ingredients justify higher food cost percentages, but you still need limits. Consider 30-38% acceptable for high-end operations, but price your menu accordingly to maintain profits.
I just opened and have no baseline. Where do I start?
Use the 28-35% range as your initial target and track everything closely for your first three months. Adjust your purchasing patterns once you see which dishes and ingredients drive your costs.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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