Restaurant Food Cost Management UK 2025: The 30-35% Rule Explained

Food cost percentage is the single most important metric for restaurant profitability. The industry standard 30-35% rule means your ingredients should cost 30-35p for every £1 you charge. Master this, and your restaurant thrives. Ignore it, and you are bleeding money daily.

What is Food Cost Percentage?

Food Cost Formula:

Food Cost ÷ Selling Price × 100 = Food Cost %

Example: £18 Steak

• Steak (200g): £4.20
• Chips: £0.40
• Vegetables: £0.80
• Sauce: £0.35
• Garnish: £0.25
• Total cost: £6.00
• Selling price: £18.00
• Food cost %: £6 ÷ £18 × 100 = 33.3% ✅
• Gross profit: £12.00 (66.7% GP)

Target Food Cost % by Restaurant Type

Restaurant Type	Target Food Cost %	Why Different?
Fine Dining	28-32%	Premium pricing, smaller portions, higher labor costs
Casual Dining	30-35%	Industry standard, balanced menu
Fast Casual	26-30%	High volume, standardized portions
Takeaway/Quick Service	25-30%	Bulk buying, limited menu, minimal waste
Cafe/Breakfast	32-38%	Lower menu prices, breakfast items have lower GP

How to Calculate Food Costs for Your Entire Menu

Follow this 5-step process monthly to track food cost percentage accurately:

Opening Stock Value

Count and value all food inventory at start of month. Use invoice prices, not selling prices.

Add Purchases

Total all food deliveries during the month. Include everything from suppliers, cash & carrys, emergency shops.

Subtract Closing Stock

Count and value inventory at end of month. Be honest—expired items have zero value.

Calculate Cost of Sales

Opening stock + Purchases - Closing stock = Cost of goods sold (COGS)

Divide by Food Revenue

COGS ÷ Total food sales × 100 = Food cost percentage

Menu Pricing Strategies

Price menu items to achieve your target food cost percentage:

Pricing Formula:

Menu Price = Food Cost ÷ Target % × 100

Example: Burger with £3.50 cost, 32% target

£3.50 ÷ 32 × 100 = £10.94

Round to £10.95 or £11.00. At £11.00, your food cost is 31.8% ✅

Portion Control: The Silent Profit Killer

Inconsistent portions destroy margins. A restaurant serving 100 mains daily can lose £15,000+ annually from over-portioning:

Real Example:

Chips portion: Specified 200g, staff serving 250g (25% extra)

• Extra cost per portion: £0.35
• 100 portions daily × £0.35 = £35/day
• £35 × 365 days = £12,775/year lost

Solution: Weigh portions during service randomly. Use measuring scoops for chips, pasta, rice.

Reducing Food Waste

UK restaurants waste 18-20% of food purchased (WRAP 2024). Reducing waste from 20% to 10% on £120k annual food spend saves £12,000. Here is how:

Daily Prep Logs

£200-400/month

Track exactly what is prepped vs sold. Adjust prep quantities based on historical data.

FIFO Stock Rotation

£150-300/month

First In First Out. Label everything with dates. Older stock to front of fridge.

Specials for Near-Expiry

£100-250/month

Use ingredients approaching expiry in daily specials. Better sold at 50% GP than binned.

Portion Control Training

£300-600/month

Kitchen staff weigh portions until they can eyeball accurately. Spot check regularly.

Menu Engineering

£200-500/month

Remove dishes with high waste. Complex dishes with 12+ ingredients waste more.

Menu Engineering Matrix

Categorize every menu item by popularity and profitability:

⭐ Stars

High profit + High popularity

Action: Feature prominently, upsell heavily, maintain quality

🐴 Workhorses

Low profit + High popularity

Action: Increase prices 5-10% or reduce portion costs slightly

🔮 Puzzles

High profit + Low popularity

Action: Promote more, reposition on menu, or remove if still slow

🗑️ Dogs

Low profit + Low popularity

Action: Remove immediately. They cost money and menu space

Supplier Negotiation Tactics

Get 3 quotes: Compare Brakes, Bidfood, and local suppliers. Prices vary 15-25% on same items
Consolidate orders: Fewer suppliers = better prices. Aim for 2-3 main suppliers maximum
Review quarterly: Suppliers increase prices quietly. Challenge every increase or source elsewhere
Buy seasonal: British asparagus in June costs 40% less than imported in December
Cash & carry for dry goods: Often 10-20% cheaper than delivered. Worth the trip for items like oil, tinned goods
Join buying groups: NCASS, Cobra, etc. Pool buying power with other restaurants

Hidden Costs Destroying Your Margins

Staff meals

£200-500/month

Set strict policy: One meal per shift, specific items only, logged

Comped meals

£150-400/month

Manager approval required. Track all comps. Set 2% monthly limit

Over-garnishing

£100-250/month

Exact portion guides. Three basil leaves, not a handful

Incorrect stock rotation

£200-600/month

FIFO strictly enforced. Date label everything. Weekly fridge checks

Recipe drift

£300-800/month

Written recipes with weights. Kitchen spot checks. Retrain when portions creep up

Food Cost Control Checklist

Daily:

☐ Check deliveries match invoices (quantity and quality)
☐ Log all wastage with reasons
☐ Spot check 2-3 portion sizes during service
☐ Review specials board sales vs waste

Weekly:

☐ Full fridge and dry stock check
☐ Review food sales vs covers (average spend per head)
☐ Check for items approaching expiry
☐ Review wastage log for patterns

Monthly:

☐ Full stocktake and food cost % calculation
☐ Compare food cost % to target (30-35%)
☐ Menu engineering review (stars, dogs, etc.)
☐ Supplier price comparison
☐ Update recipe costs if prices changed

What to Do if Food Costs Are Too High

If your food cost percentage is above 38%, take immediate action:

Identify the culprits: Calculate food cost % for each menu category (starters, mains, desserts). Find the problem areas.
Rewrite recipes: Specify exact weights. 180g not "one chicken breast." 50g not "handful of chips."
Source alternatives: Can you use British chicken instead of French? Frozen peas instead of fresh? Same quality, lower cost.
Increase prices 5-8%: Customers rarely notice gradual increases. £11.95 to £12.95 is accepted if justified by quality.
Remove low-margin items: That £9.95 "loss leader" burger bringing people in? It is costing you money if food cost is 45%+.

Technology to Control Costs

EPOS with Recipe Integration

Cost: £50-100/month

Auto-calculates theoretical food cost vs actual. Flags variances immediately.

Inventory Management Software

Cost: £30-70/month

Tracks stock levels, alerts on low stock, auto-generates orders.

Kitchen Display Systems

Cost: £40-80/month

Reduces errors, speeds up service, tracks prep times for labor planning.

Digital Recipe Books

Cost: Free-£20/month

Accessible on tablets in kitchen. Update recipes instantly across all locations.

Conclusion

The 30-35% food cost rule exists because it works. Restaurants consistently hitting this target remain profitable even with rising costs. Calculate your food cost monthly, control portions religiously, reduce waste systematically, and engineer your menu for profitability.

Remember: You cannot control rent or rates, but you can absolutely control food costs. It is one of the few areas where immediate action creates immediate profit improvement.