Food Cost Percentage Explained (and How to Lower It)

Food cost percentage is the number your accountant keeps asking about and the one most owners can never quite pin down. Here is what it means, how to work it out, and seven ways to bring it down that do not involve cheaper ingredients.

What it actually is

Food cost percentage is your ingredient cost as a share of the ex-VAT selling price. It is the mirror image of gross profit: if your food cost is 30%, your GP is 70%. They always add to 100.

food cost % = ingredient cost ÷ ex-VAT selling price

For a dish that costs £2.41 to make and sells for £9.50 (ex-VAT £7.92): £2.41 ÷ £7.92 = 30% food cost (and therefore 70% GP).

The benchmark

Most UK restaurants run a food cost of 28–35% across the menu — the inverse of the 65–72% GP target. Above 35% and your margins are too thin to cover labour and rent; below 28% and you may be over-pricing or under-portioning in a way guests notice.

You can check the food cost % of any dish instantly with our free dish GP calculator — it shows food cost and GP side by side as you adjust the recipe.

Seven ways to lower food cost without cutting quality

1. Re-cost your top ten sellers quarterly. Supplier prices drift up; your menu prices do not follow automatically. The biggest leaks are almost always in your bestsellers, because volume multiplies the loss.
2. Tighten portion control. A £0.40 over-portion on a dish you sell 60 times a week is £1,250 a year — on one dish. Weigh proteins; standardise the plate.
3. Engineer the menu. Put your high-GP dishes where the eye lands (top-right, boxed, "chef's pick") and quietly de-emphasise the low-GP ones. Same menu, better mix, higher blended GP.
4. Use the whole product. Trim, bones, off-cuts and day-old bread are stock, croquettes, specials and staff food — not bin liner. Falling wastage falls straight to GP.
5. Cross-utilise ingredients. A pantry of 40 ingredients that combine into 20 dishes wastes far less than 120 single-use ingredients. Fewer SKUs, fresher stock, less spoilage.
6. Review supplier prices, not just suppliers. You do not always need a new supplier — a quick "is this still your best price?" call, with volume on the table, often moves the number.
7. Build wastage into the price from day one. If you only price the raw recipe, every bit of trim and spoilage comes straight out of your margin. Add a realistic wastage % before you set the price — the calculator does this for you.

The trap of chasing food cost alone

A low food cost on paper means nothing if the restaurant is empty. The goal is not the lowest possible food cost — it is the healthiest profit, which needs both a well-costed menu and enough of the right people coming through the door.

That second half — getting bums on seats — is what we do at Strapture: content, photography and Meta ads built to fill more tables for UK hospitality venues. Get your costings tight with the free calculator, then book a free call and we will help you fill the seats those margins are waiting for.