Restaurant COGS: The Complete Guide to Food Cost

Your restaurant food cost is the most controllable number you have, and it's the one most owners never quite pin down. It's the cost of everything you put on the plate, measured against what you sell it for. Get it right and you keep more of every euro that comes through the door. Get it wrong, or never check it, and the money leaks out a few cents at a time until a "busy" month somehow ends in the red.

Most owners weren't taught any of this. Nobody sat you down and explained cost of goods sold, the food cost formula, or what a healthy percentage even looks like. You learned to cook, to host, to run a shift. The numbers got handed to an accountant who tells you how the quarter went six weeks after it's over.

Here's the thing nobody says out loud: restaurant food cost isn't one task you do once. It's a system, five parts that feed each other. You calculate it, you benchmark it, you cost your dishes, you watch your suppliers, and you catch the creep before it compounds. Skip any one of them and the others quietly stop working. Cost your dishes but never check your suppliers, and your costings go stale. Calculate your percentage once but never benchmark it, and you have a number with no meaning.

This is the complete guide to restaurant food cost. It walks the whole system in plain language: what food cost and COGS actually are, how to calculate your percentage, what counts as good, how to cost your dishes, how to keep an eye on your suppliers, and how to catch the slow creep before it eats your margin. Each section is a short overview with a link down to the full guide on that topic, so you can read the whole thing in ten minutes or go deep where you need to. Nothing here assumes you have a finance background, because most owners don't, and you shouldn't need one to keep your own money.

What food cost (and COGS) actually is

Food cost is your cost of goods sold (COGS) expressed against sales. COGS is simply what the food and drink you sold actually cost you to buy, over a given period. Not what you ordered. Not what's sitting in the walk-in. What you used.

The formula looks like this:

COGS = opening inventory + purchases − closing inventory

You count what you had at the start of the period, add everything you bought, then subtract what's left at the end. The difference is what you consumed, and that's your cost of goods sold. Turn it into food cost percentage and you have a number you can compare week to week, month to month, against your menu, and against the rest of the industry.

The reason this matters: COGS is roughly a third of every euro in a typical full-service restaurant. It moves with every invoice, every price hike, every portion that's a little too generous. Sales get all the attention, but COGS is where the quiet wins live, because you control it directly.

Get the counting right and everything downstream gets easier. Get it wrong, and every percentage you calculate after it is built on sand.

Read the full guide to restaurant COGS →

How to calculate your food cost percentage

Your food cost percentage is your COGS divided by your sales, times 100. That's it.

Food cost % = (COGS ÷ sales) × 100

If your COGS for the month was €8,000 and you did €25,000 in food sales, your food cost percentage is 32%. You can run this for the whole business over a month, or for a single dish: a broodje gezond that costs €1.80 in ingredients and sells for €6.50 runs at 27.7%. Same formula, different scale.

The number on its own is a starting point, not an answer. A food cost percentage tells you where you stand. What you do next, reprice, re-portion, renegotiate, or leave it alone, is the part that actually moves money. We come back to that throughout this guide.

The trap most owners fall into is calculating it once, in a panic, then never again. Food cost is a moving target. Supplier prices shift, your mix of dishes changes with the seasons, portions drift. A number you worked out in January tells you almost nothing about June.

One more thing worth getting right: there's theoretical food cost, what your recipes say you should be spending, and actual food cost, what your invoices say you actually spent. The gap between the two is waste, theft, over-pouring, and portions that have quietly grown. When owners say their numbers "feel off," that gap is usually where it lives.

Read the full guide to calculating food cost percentage →

What's a good food cost percentage?

A good restaurant food cost sits somewhere between 28% and 35% for most full-service venues. The often-quoted industry average is around 32.4% for full-service restaurants (NRA 2026 [verify before publish]). But the honest answer is that it depends on what you serve.

A pizzeria runs lower because flour and tomato are cheap and the markup is high. A steakhouse or a seafood place runs higher because the raw product is expensive and there's a ceiling on what you can charge. A wine bar's drink costs look nothing like its kitchen costs. Comparing your number to a single industry average can mislead you in either direction.

What matters more than hitting a magic number is knowing your own baseline and watching the direction it moves. If you've been running at 30% all year and you're suddenly at 34%, that two-point drift is the signal, not whether 34% is "good" in the abstract. On €25,000 of monthly sales, those four points are €1,000 a month walking out the door.

So set your own target per category rather than borrowing a single number. Your kitchen, your bar, and your coffee each have a different healthy range, and a blended average can hide a bar that's leaking while your kitchen carries it. Once you know what good looks like for your own menu, every weekly reading becomes a quick yes or no instead of a guess.

Read the full guide to a good food cost percentage →

Costing your dishes (recipe and menu costing)

Recipe costing is working out exactly what each dish costs to make, ingredient by ingredient, so you know its margin before you price it. Your overall food cost percentage is an average. Recipe costing is where you find out which dishes are carrying the average and which are dragging it down.

This is the part that surprises owners most. Your best seller is often your least profitable plate. The dish that flies out the kitchen all night might run a 45% food cost while the one you barely think about runs 22%. Without costing each recipe, you're flying blind on the exact decisions that move margin most: what to push, what to reprice, what to quietly drop.

Do it once properly and you can engineer your menu around it. Feature the high-margin, popular items. Reprice or re-portion the high-cost ones. Drop the dishes that cost you to keep on the menu. A few cents of margin on your top ten sellers, multiplied across a year, is real money.

The catch is that recipe costing is tedious by hand, and it goes stale the moment a supplier price changes. Most spreadsheets get built once and abandoned by week three.

Read the full guide to recipe and menu costing →

Watching your suppliers (price increases)

Supplier price increases are the most common reason food cost creeps up without anyone noticing. Your recipes didn't change. Your portions didn't change. But the price of oil, beef, or dairy ticked up 8% on an invoice you glanced at and filed, and now every dish using that ingredient earns you a little less.

This is the leak that's hardest to see manually, because it doesn't arrive as one big shock. It arrives as a few cents here, a few cents there, across dozens of line items on invoices you don't have time to read closely. By the time it shows up in your monthly numbers, it's been bleeding for weeks.

Owners who catch this early do one of two things: they push back on the supplier, or they adjust the menu price to match. Both depend on noticing the increase in the first place. A 6% jump on your main protein supplier, caught the week it happens, is a conversation. Caught three months later, it's a margin hole you have to dig out of.

Read the full guide to tracking supplier price increases →

Why food cost creeps, and catching it early

Food cost creep is the slow, quiet rise in your costs that happens without any single dramatic cause. No one decision breaks your margin. It's the sum of a dozen small ones: a supplier price up here, a portion that grew there, a bit more waste, a promo that ran too long, a menu mix that shifted toward your cheaper-to-buy but lower-margin dishes.

Each one is too small to notice on its own. Together they walk your food cost from 30% to 34% over a season, and because there's no single villain, there's no single moment where you catch it. You just feel that things are tighter than they should be, and you can't say exactly why.

The defense is regular, frequent measurement. Not once a quarter when the accountant closes the books, but week to week, so a two-point drift shows up as a two-point drift while it's still small enough to fix. Catching creep early is the difference between a quick adjustment and a painful end-of-year reckoning.

Read the full guide to food-cost creep →

Food cost is half the picture: prime cost

Food cost is the first of your two big controllable numbers. The second is labour. Add your COGS and your total labour cost together and you get your prime cost, the single most important figure in restaurant finance.

Prime cost typically runs 55% to 65% of sales in a healthy restaurant. It captures the two things you control most directly, food and people, in one number. You can run a tidy 30% food cost and still go under if your labour is out of line, which is why owners who only watch food cost are watching half the game.

We'll cover prime cost in full in its own guide. For now, the takeaway is that food cost is necessary but not sufficient. Master it first, because it's the most controllable lever you have, then layer labour on top to see the whole picture. The two move together more than owners expect: a poorly costed menu pushes prep labour up, and an understaffed kitchen drives waste up. Watch one in isolation and you'll keep chasing a problem that lives in the other.

Turning this into a system

That's the whole system: calculate your food cost, benchmark it, cost your dishes, watch your suppliers, and catch the creep early. Done by hand, it's a stack of spreadsheets you update a month behind, if you keep them up at all.

Klar does it automatically. It reads your invoices and your POS sales, works out your food cost and your plate costs, flags when a supplier price drifts, and tells you when your numbers are creeping, all on your phone, current to the day. Your POS shows what happened. Klar tells you what to do about it: which dish to reprice, which supplier crept, with the euro amount next to it. You forward your daily sales email, it handles the rest, and tomorrow morning before your first coffee you get one clear action.

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— The Klar team