Glossary
Food cost percentage
Food cost percentage is a dish's ingredient cost divided by its menu price, showing what share of the sale goes to food.
How to use food cost percentage
Divide plate cost by menu price to get the food cost percentage. It is the most common pricing yardstick in the industry, with most full-service concepts targeting roughly 28 to 35 percent.
It is a guide, not a rule. Because it ignores dollar margin, a low percentage on a cheap item can earn less cash than a higher percentage on an expensive one, so operators read it alongside contribution margin.
- Formula — plate cost divided by menu price
- Typical target — about 28 to 35 percent for full service
- Read it with contribution margin, never alone
Example
A dish costs $4.50 to plate and sells for $15, a 30 percent food cost. To hit a 28 percent target, the kitchen would price it closer to $16.
See also
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