What is a healthy food cost for a bar or restaurant
Food cost, or cost ratio, is what the food you sell costs you, divided by what it brings in before VAT. For most restaurants, between 25% and 35% is considered optimal (Guía Repsol, in Spanish). It tends to be lower in a tapas bar and higher in fine dining. More than hitting an exact figure, what matters is knowing yours and watching how it moves.
How it is calculated
Food cost = cost of food ÷ food sales before VAT × 100
It can be worked out for one dish or for the whole business:
- Per dish: the cost per portion from the recipe cost, divided by the selling price before VAT. Patatas bravas that cost €0.65 and sell for €5.45 before VAT have a 12% food cost.
- For the business: the average across the whole menu, which depends on which dishes you sell most. This average is what counts, not each dish. A cheap dish makes up for a fresh fish dish that leaves less.
Drinks are worked out separately (beverage cost), because their margins are very different and mixing them hides what is happening in the kitchen.
Theoretical and actual food cost
- Theoretical: what you should have spent according to your recipe costs and what you sold.
- Actual: what you really spent, which comes from your stock count:
Usage = opening stock + purchases − closing stock
For example, over a month:
| Item | Amount |
|---|---|
| Opening stock | €3,000 |
| Food purchases for the month, before VAT | €10,500 |
| Closing stock | €3,200 |
| Usage | €10,300 |
| Food sales before VAT | €30,000 |
| Actual food cost | 34.3% |
If your recipe costs say it should have been 30% (€9,000), €1,300 has gone somewhere: trim waste missing from the recipes, portions bigger than planned, food thrown away, items given away, invoice errors or prices that rose without you noticing.
What figure is healthy for you
25–35% is a guide, not a rule. What works for you depends on:
- Your concept. A tapas bar or a café can work with lower percentages than a restaurant built around premium produce.
- Your other costs. If staff or rent weigh heavily, you need a lower food cost for the numbers to work.
- Your prices. A low food cost on an expensive menu that does not sell is no use.
The most useful figure is your own, month by month. If it rises while your menu has not changed, something has changed in your purchasing or in the kitchen.
If your food cost is too high
- Check the recipe costs of your best sellers. They are what move the average.
- Check your suppliers’ price rises. Rises of a few cents go unnoticed one by one, but they add up: see how to keep supplier price rises under control.
- Adjust the menu price. A few cents on a dish you sell a lot usually recovers more margin than any other change.
- Fix the portions. Weigh the portions of expensive dishes and write the amount down.
- Control waste. Buy according to what you sell and use leftovers in the set lunch menu.
- Always count stock the same way. Same day of the month and same units, so the actual food cost can be compared from one month to the next.
Want to know a dish’s food cost right now? Work it out in the free recipe costing calculator.