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Calculating food cost in a restaurant: where most owners leave money on the table

2026-08-11

A dish that's sold well on your menu for years can still cost you money instead of making it, if the food cost has never been recalculated. On a fixed menu you don't work out the margin once for a quote, you sell the same dish night after night, and every unnoticed slip repeats itself just as often. In this article I'll show you how to calculate the cost price per dish, what a healthy food cost percentage looks like for a restaurant, and where margin most often quietly slips away.

Why food cost works differently in a restaurant than for a quote

With a catering quote, you work out the cost price once, for one event, then send a price out the door. With a fixed menu, that's different. You sell the same dish night after night, month after month, and a cost price mistake that's a one-off with a quote repeats every single time that dish gets ordered in a restaurant. Changing a price on the menu also feels bigger than adjusting a quote: guests see it, and changing it too often raises questions. As a result, prices on many menus stay unchanged for years, while purchase prices behind the scenes keep quietly rising.

How to calculate the cost price per dish

The basics are the same as any other cost price calculation: add up the purchase price of every ingredient in the exact quantity the recipe calls for.

• 180g meat or fish: £2.10
• Vegetables and side: £0.80
• Sauce, herbs, garnish: £0.40
• Total cost price per plate: £3.30

Sell that dish for £19.50, and your food cost sits at just over 17%. The formula stays the same:

Food cost% = (ingredient cost price per plate ÷ selling price) × 100

Do this calculation for every dish on the menu individually, not just as an average across the whole menu. A popular dish with too thin a margin can eat into the profit of three other dishes without it ever showing up in your total revenue.

What percentage is healthy for a restaurant?

For a restaurant with a fixed menu, a healthy food cost usually sits between 28 and 35%, slightly higher than for a catering quote, because rent, fixed staffing and ongoing stock all need to fit into the rest of your pricing.

• Mains: often 28–32%. The margin in the selling price also has to cover service and the premises.
• Starters and desserts: often lower, 20–25%, and so compensate for dishes with a tighter margin.
• Drinks and wine: usually well under 30%, and therefore contribute relatively more to your overall margin than most dishes.

These are guidelines, not rules. More important than a fixed number is knowing where you stand per dish, instead of trusting a feeling that the menu "probably adds up".

Where margin quietly slips away, dish after dish

Most food cost problems in a restaurant don't start when the menu is put together, they start in the repetition of every single service:

• Purchase prices that creep up gradually without the menu price ever being reviewed, sometimes for years.
• Portioning that drifts from the recipe, because the kitchen plates by feel rather than by weight, and that repeats every single evening.
• "Dead" dishes on the menu that are barely ordered anymore, but still take up space, stock and attention.
• Waste that isn't counted as a cost, while the plate that comes back or the scraps that get binned did cost money.

Each of these points is small on its own. Added up over hundreds of covers a week, they make the difference between a menu that sells well on paper and a restaurant that's busy but barely has anything left over.

Keeping an eye on food cost without it becoming a full-time job

Restaurant owners who genuinely keep food cost under control do two things differently. First, they calculate the cost price per dish properly once, and update it as soon as a purchase price noticeably changes, instead of recalculating the whole menu every time. Second, they keep a simple overview per dish, with cost price, selling price and food cost percentage side by side, so it's immediately visible which dish is dragging down the margin and which one is giving you room.

That overview doesn't need to be complicated. It's enough to spot patterns: which dishes you should be recommending more often, and which ones are better off repriced or dropped from the menu.