What Is a Healthy Food Cost Percentage for Restaurants?
Food cost percentage is one of the most watched numbers in restaurant operations — and one of the most misunderstood. Knowing your number is step one. Knowing which items are driving it above target is where the money actually is.
The industry benchmark: 28–32%
Full-service restaurants typically target 28–32% food cost as a percentage of revenue. Fast casual tends to run slightly lower (25–30%) because of simpler prep and higher volume. Fine dining can tolerate higher food cost because check averages and margins from bar and wine offset it.
These ranges aren't rules — they're starting points. A restaurant running at 35% that has strong labor efficiency and low overhead can still be healthy. A restaurant at 29% with bloated labor might be in worse shape. Food cost matters most in context.
How to calculate your food cost percentage
Food Cost % = (Cost of Goods Sold ÷ Revenue) × 100. COGS = Beginning Inventory + Purchases − Ending Inventory. Most POS systems give you revenue. Getting accurate COGS requires consistent inventory counts — which is where most operators fall short.
If you're using a POS like Square, Toast, or Clover, your weekly sales summary contains enough data to get a directional food cost estimate — even without a full inventory system.
What's actually pushing your food cost above target
In our analysis across hundreds of restaurant CSV exports, the most common culprits are:
- ▸Items priced below cost — usually proteins added to the menu without a pricing update after a supplier increase
- ▸Portion drift — gradual increases in serve size that aren't reflected in recipe cost
- ▸Waste on high-cost items — proteins and prepared sauces that don't turn fast enough
- ▸Comps and voids that aren't tracked separately, masking the real revenue number
The fastest way to find the problem items
Pull your last 90 days of sales by item from your POS. Sort by revenue descending. For each of your top 20 items by revenue, calculate what your actual food cost is per unit — your current supplier price times your portion size. If any item is above 34%, that's your starting point.
Most operators find 3–6 items that are quietly above threshold. Repricing those items — or adjusting their portion — typically recovers $400–900/month without changing anything else in the business.
See these numbers applied to your business.
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