How to Calculate COGS for a Restaurant (Formula + Worked Example)

COGS (cost of goods sold) = Beginning inventory + Purchases − Ending inventory. It's the actual euro cost of the food and drink you sold in a period. That's the whole calculation, and learning how to calculate COGS for a restaurant takes about two minutes once you have the three numbers in front of you.

You know what you bought. You know what you sold. As one owner put it: "I know what I bought and what I sold. Tying them together every week? That's where I give up." That tying-together is COGS, and this post walks you through it with a real euro example you can copy.

What is COGS (cost of goods sold)?

COGS is the actual cost of the stock you used up to make your sales in a given period. Not what you bought, not what's sitting in the walk-in. What you actually consumed serving customers.

The gap matters. If you bought €6,200 of stock this week but you also started the week with a full fridge and ended it with a fuller one, you didn't use €6,200 of food. You used less, because some of those purchases are still on the shelf. COGS corrects for that by accounting for what was in stock at the start and what's left at the end.

For a restaurant, COGS covers food and beverage: the ingredients, the wine, the beer, the soft drinks, the coffee. It does not include labour, rent, energy, or your supplier's delivery fee. Those are real costs, but they're not cost of goods sold. (More on what counts in the FAQ.)

The COGS formula

The COGS formula for a restaurant is:

COGS = Beginning inventory + Purchases − Ending inventory

Three numbers:

• Beginning inventory — the value of the stock you had on hand at the start of the period (the count you took last week, basically your previous ending inventory).
• Purchases — everything you bought from suppliers during the period, at cost. This comes straight off your invoices.
• Ending inventory — the value of the stock you have on hand at the end of the period (a fresh count).

Add what you started with to what you bought, then subtract what's left. The result is the cost of the goods that actually left your kitchen as meals and drinks.

A worked example (with the inventory counts)

Say you run a café and you want last week's COGS. You counted your stock on Sunday night a week ago, you've got a pile of supplier invoices, and you counted again last night.

So: €4,000 + €6,200 − €4,400 = €5,800. That €5,800 is what the food and drink you served actually cost you last week. Note that your ending inventory went up (€4,400 vs €4,000), which is why your COGS is lower than your purchases. You stocked up a bit; not all of it went out the door.

That single number is the foundation for every margin calculation you'll ever do. Get it right and the rest is real instead of guessed.

COGS vs food cost percentage: how they connect

COGS is a euro amount; food cost percentage is a ratio. They're related but they answer different questions. COGS tells you how much the goods cost. Food cost percentage tells you how much of every sale goes to those goods.

To get from one to the other, divide COGS by sales:

Food cost % = COGS ÷ Sales × 100

Carrying our example forward: if that €5,800 of COGS sat against €18,000 in sales for the week, your food cost percentage is €5,800 ÷ €18,000 × 100 = 32.2%.

That's the bridge. COGS is the raw cost; the percentage is what you benchmark and manage against. We won't re-teach the ratio in full here, because it has its own home: read how to calculate food cost percentage for the full method, and what is a good food cost percentage to see where 32.2% sits against the benchmarks for your type of venue. This post owns the euro amount; that one owns the ratio.

How often should you calculate COGS?

Calculate COGS weekly if you want to catch problems in time to fix them, and monthly at minimum for the books. The cadence changes what the number is for.

A monthly COGS is what your accountant needs and what closes your P&L. It's accurate, but it's a rear-view mirror. If a supplier quietly raised your meat price in week one, a monthly count means you don't see the damage until five weeks later, by which time you've served four more weeks at the wrong margin.

A weekly COGS catches that cost while you can still do something about it. You see it inside the trading period, ring the supplier, swap the product, or nudge the menu price. The number suggests an action: "your protein cost jumped €0.40 a portion this week, raise the burger by 50 cents." That's the difference between knowing your margin and managing it.

The catch, of course, is that the weekly version means a weekly count.

The catch: COGS needs a stock count

Every accurate COGS depends on a stock count, and that's the part nobody enjoys. To get beginning and ending inventory, you physically count what's on the shelves, in the fridge, in the walk-in, and price it all up. It's the Sunday-night job that gets skipped first when you're tired.

That's exactly why most owners only ever see their COGS monthly, if at all. The maths is easy. The count is the work, and the count is what makes weekly COGS feel impossible when you're already doing fourteen-hour days.

So you're left with a trade-off: count weekly and stay current but lose your Sunday nights, or count monthly and always be a few weeks behind on your margins. Unless you can get the number without the count.

Frequently asked questions

What does COGS mean for a restaurant?

COGS (cost of goods sold) is the actual euro cost of the food and beverage you used to make your sales in a period. It's the truest measure of what your menu costs you, and it's the starting point for working out your margins.

What's the COGS formula?

COGS = Beginning inventory + Purchases − Ending inventory. Take the value of stock you started with, add everything you bought from suppliers, and subtract the value of stock left at the end. The result is the cost of the goods you actually sold.

Is COGS the same as food cost?

No. COGS is a euro amount (what the goods cost); food cost percentage is a ratio (COGS ÷ sales × 100). People use the terms loosely, but they're different numbers answering different questions. See how to calculate food cost percentage for the ratio.

How often should I calculate COGS?

Weekly if you want to catch cost problems in time to act on them, monthly at minimum for your accounts. Weekly counts find a creeping supplier price within the trading period; monthly counts are for the books, when it's too late to change anything that week.

What's included in COGS for a restaurant?

Food and beverage at cost: ingredients, wine, beer, soft drinks, coffee. COGS does not include labour, rent, energy, or overhead. Labour sits in a separate calculation (prime cost combines COGS and labour). Recipe and menu costing feed your COGS, and supplier price increases move it week to week.

For the full picture of restaurant COGS and food cost, our complete restaurant COGS guide ties all of this together.

How Klar gives you COGS without the count

COGS is simple maths sitting on top of a stock count nobody enjoys doing weekly. So Klar does the count's job for you. It reads your supplier invoices and your POS sales and works out your cost of goods sold continuously, with no Sunday-night count, so your margins are current instead of a month behind. A supplier price that moves shows up the week it happens, with the action next to it, not buried in a month-end report you read too late. Your POS shows what happened. Klar tells you what to do about it. Klar is opening to launching partners now — join the waitlist at klar.works.

By the Klar team. Published 9 June 2026. Formula is standard restaurant accounting; worked figures are illustrative.