A restaurant owner discovers their pasta carbonara's food cost jumped from 28% to 35% overnight. Same revenue, higher costs - profit vanishing fast. This scenario plays out when supplier prices creep up or portion control slips.
Why is your food cost rising with the same revenue?
Revenue stays flat while food costs climb? You're hemorrhaging profit. Several culprits drive this problem:
- Suppliers raise prices - this often happens gradually
- Portion sizes get bigger - your chef gives more than you budgeted for
- More expensive ingredients - without adjusting your menu price
- More waste - due to incorrect purchasing or preparation
💡 Example:
Your pasta carbonara had a food cost of 28%. Now it's 35%.
- Revenue per month: €50,000
- Difference: 7 percentage points
- Extra costs: €3,500 per month
That's €42,000 per year less profit!
Check your numbers first
Before taking action, pinpoint exactly where the problem lies. Pull your top-selling dishes and recalculate their cost price.
Food cost formula:
(Ingredient costs / Selling price excl. VAT) × 100
⚠️ Note:
Always calculate with the selling price excluding VAT. For food that's your menu price divided by 1.09.
Three options to solve it
You've got three moves available once food costs spiral upward:
Option 1: Raise prices
The most straightforward fix. Calculate the minimum charge needed to hit your target food cost.
Formula:
New selling price = Ingredient costs / (Desired food cost% / 100)
💡 Example:
Your steak now costs €12 in ingredients. You want 30% food cost.
- Minimum price excl. VAT: €12 / 0.30 = €40
- Price incl. 9% VAT: €40 × 1.09 = €43.60
If you're currently charging €38, you need to move to €43.60.
Option 2: Lower costs
Hunt down ways to slash ingredient expenses without killing quality:
- Negotiate with suppliers for better prices
- Find alternative suppliers
- Adjust recipes with cheaper ingredients
- Reduce waste through better planning
Option 3: Standardize portion sizes
Check if your chef's giving more than you budgeted for. Measure actual portions over several days and compare with your recipes. I've seen this mistake cost the average restaurant EUR 200-400 per month in uncontrolled portion creep alone.
💡 Example:
You budget for 200g steak, but your chef gives 250g.
- Difference: 50g extra per portion
- At €24/kg beef: €1.20 extra per plate
- At 200 portions per month: €240 in extra costs
Per year: €2,880 less profit from this one portion alone!
Which option do you choose?
The smartest approach depends on your situation:
- Raise prices - if your competitors also got more expensive
- Lower costs - if your prices are already on the high side
- Standardize portions - always a good idea, costs nothing
Often a combination works better than any single approach. Raise your prices by 5%, lower your costs by 3%, and standardize your portions.
Monitor your progress
Check your food cost for your top dishes weekly. That way you'll spot changes immediately and can adjust quickly.
A system like a food cost calculator helps track this automatically, so you don't have to calculate manually every week.
How do you tackle rising food cost? (step by step)
Recalculate your current food cost
Take your 5 best-selling dishes and add up all ingredient costs. Divide this by your selling price excluding VAT and multiply by 100 to get the percentage.
Identify the cause
Check whether suppliers raised prices, portion sizes got bigger, or there's more waste. Measure actual portions going out for a few days.
Choose your approach
Raise prices, lower costs, or standardize portions. Calculate the effect of each option on your profitability and choose the best combination.
✨ Pro tip
Start by weighing actual portions for your top 3 dishes over the next 72 hours - portion creep often delivers an immediate 2-3 percentage point improvement once corrected. Track everything your kitchen staff serves during peak hours.
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
How much can I raise my prices without losing customers?
An increase of 5-8% is usually accepted if it happens gradually. First check what your competitors are charging for similar dishes.
What if my supplier refuses to negotiate on prices?
Look for alternatives and compare total costs including quality and service. Sometimes a slightly more expensive supplier ends up cheaper due to less waste.
How often should I check my food cost?
Check your top dishes weekly and your full menu monthly. This prevents problems from going unnoticed for too long.
Can I reduce portion sizes without customers noticing?
Yes, but do it subtly. Reduce by a maximum of 10-15% and compensate with better presentation or extra garnish that costs little.
What is an acceptable food cost for my type of restaurant?
For most restaurants this is between 28-35%. Fine dining can be higher (up to 38%), fast casual often lower (25-30%). It depends on your concept and cost structure.
Should I adjust all menu prices at once or gradually?
Roll out price changes gradually over 2-3 months, starting with your most popular items. Customers adapt better to staggered increases than sudden across-the-board jumps.
📚 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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