Every restaurant owner knows their food cost "should be around 30%". Far fewer measure it correctly, and fewer still know why it moved. Here is the working method we apply across our F&B clients.
Measure it right first
Food cost % = (Opening inventory + Purchases − Closing inventory) ÷ Net sales excluding VAT. Two errors ruin the number before analysis starts: skipping stock counts (purchases ≠ consumption) and using VAT-inclusive sales (which flatters the ratio by about 1.5 points). Strip VAT by dividing by 1.05.
The five usual leaks
- Supplier price creep. Unit prices drift upward invoice by invoice. Monthly supplier reconciliations with price-per-unit tracking catch it; goodwill catches nothing.
- Missing credit notes. Rejected or short-delivered goods that were never credited are pure cost. Chase them while the delivery note is still findable.
- Portioning drift. Recipes exist; scales get ignored. If theoretical cost (from recipes and menu mix) sits well below actual cost, the kitchen is the gap.
- Wastage and staff meals. Untracked, they hide inside food cost and look like theft. Tracked, they become manageable line items.
- Delivery menu mix. Aggregator-heavy sales change your mix and your effective margins after commission. Watch channel-level profitability, not just the blended number.
Trend beats snapshot
One month at 33% is a data point; three months climbing from 29% to 33% is a diagnosis. The discipline that matters is monthly: count stock, reconcile suppliers, compute the ratio the same way every time, and investigate movements above a point. That cadence is exactly what a proper monthly management report gives you — the number, the movement, and the reason.