Restaurant ingredient costs: track actual consumption

A large delivery on the last day of the month can increase purchases without the food being served. Dividing supplier invoices by sales is therefore insufficient. Stock changes must be included.

Define the scope

Track food and drinks separately when reviewing each cost percentage. Food consumption should be compared with food sales. If combining categories, include the same ones in both cost and revenue.

Use purchases excluding recoverable VAT and sales excluding VAT. Treat packaging and other order costs consistently, preferably separately from ingredients.

Calculate consumption for the same period

Opening stock + purchases − closing stock = consumption.

Adjust for documented supplier returns and transfers between venues. The method is described in BCcampus’s textbook on monthly food costs.

Hypothetical example: opening food stock of SEK 50,000, purchases of SEK 140,000 and closing stock of SEK 40,000 produce consumption of SEK 150,000. With food sales of SEK 500,000 excluding VAT, food cost is 30%. Using purchases alone would incorrectly give 28%.

Count in a consistent order using the same units and valuation approach. Check deliveries around the reporting boundary. Do not replace a missing count with an arbitrary percentage of the previous stock figure.

Identify why the result changed

Compare actual consumption with theoretical usage: recorded sales multiplied by current recipe costs. Differences can reflect waste, portion changes, purchase prices, incorrect product entries or counting errors.

Record discarded food with reasons such as overproduction or expired shelf life. If waste is already included through the inventory calculation, do not add it again. The waste log explains the cause.

Improve what the evidence points to

For recurring overproduction, review quantities prepared and preparation times. For inconsistent portions, clarify recipes and measuring tools. For changed prices, compare supplier price, quality, usable yield and delivery terms.

Bulk buying is not always cheaper in practice if it ties up cash or leads to disposal. Seasonal ingredients may suit the menu, but check actual offers rather than assuming a particular price.

Track currency as well as percentages

A higher selling price can reduce food cost percentage without reducing consumption. Product mix can also change it. Review sales, costs in currency and labour time together.

Vendion Analytics provides product sales and recorded cost information. Physical stock counts and correct purchasing records remain necessary. Book a demo using a completed month from your restaurant.