Food cost for cafés and restaurants — recipes, portions and waste

A busy cafeteria can sell hundreds of sandwiches and cups of karak a day and still end the month with less money than expected. The usual reason is not the rent or the salaries; it is food cost that nobody measured. This article shows how to cost a recipe properly, how to compare what you should have used with what you did use, and where the gap usually hides.

What food cost means

Food cost percentage is what the ingredients of a dish cost you, divided by what you receive for it. Two details catch many owners out.

First, in the UAE the menu price shown to customers includes 5% VAT, and that VAT is not yours. Divide the menu price by 1.05 to get the net price before you calculate anything. A AED 12 sandwich brings in AED 11.43, not 12.

Second, cost the ingredient as it reaches the plate, not as it arrives from the supplier. Chicken loses weight when it is trimmed and cooked; lettuce loses outer leaves; a bag of bread has an end nobody wants. The share you can actually serve is the yield.

Costing one recipe: a worked example

Here is a chicken sandwich sold at AED 12. These are example numbers, not a statistic; use your own supplier prices.

Food cost: 5.51 ÷ 11.43 = 48%. If you had used the raw chicken price and ignored the yield, the chicken line would have been AED 2.88, the total AED 4.28 and the food cost a comfortable-looking 37%. Same sandwich, eleven points of margin that only exist on paper.

Many cafés aim for a food cost somewhere around 28-35%, depending on the concept and rent. At 48% you have three honest options:

1. Raise the price. To reach 35%, the net price must be 5.51 ÷ 0.35 = AED 15.74, which is about AED 16.50 on the menu.
2. Change the portion. 100 g of cooked chicken instead of 120 g saves about AED 0.69 per sandwich.
3. Change the ingredient or supplier. Thigh instead of breast, or a better price for a weekly volume.

Do the same for your drinks. A karak at AED 2 (net AED 1.90) with tea, evaporated milk, sugar, spice and a paper cup costing about AED 0.63 runs at roughly 33%. Small items add up because they sell in such numbers.

Theoretical versus actual food cost

The recipe card gives you the theoretical food cost: what the month's sales should have used. The stockroom gives you the actual food cost:

Actual food cost = opening stock + purchases − closing stock, divided by net sales.

The gap between the two is the money you want to find. In most kitchens it comes from the same few places:

• Over-portioning: a generous hand with the cheese or the chicken, a cup filled past the line.
• Waste: food prepared and not sold, spoiled stock, burnt or dropped items, mistakes sent back.
• Staff meals that nobody records.
• Unrecorded sales or theft: items made but not rung up.
• Wrong recipe data: a supplier raised prices and the recipe card still shows last year's cost.

A gap of one or two points is normal. A gap of five or more means one of the items above is happening every day.

A weekly routine that works

1. Count the expensive items every week: meat, chicken, cheese, coffee beans, cooking oil. You do not need a full stock-take for this; ten lines are enough. The full monthly count is covered in a stock-take that adds up.
2. Record waste the moment it happens, with a reason. A sheet by the kitchen door or a waste entry on the till both work, as long as it is done every time.
3. Update recipe costs when a supplier invoice shows a new price. In summer, fresh produce prices move quickly.
4. Compare theoretical and actual for those ten lines. If chicken used is 15% above what sales explain, watch portions for a week.
5. Look at the best sellers first. A 3-point improvement on the item you sell 200 times a day beats perfecting a dish you sell twice a week.

Modifiers, prep and Ramadan

Modifiers change cost as well as price. "Extra cheese" for AED 2 is fine if it really adds 20 g of cheese; "no sauce" saves you nothing if the cook adds it anyway. Price each add-on with its own small recipe.

Prep batches need their own cards. If one batch of garlic sauce uses 2 kg of mayonnaise, 300 g of garlic and lemon, cost the batch, then cost the 30 g portion from it.

During Ramadan, iftar boxes and set meals are prepared in large numbers before sunset. Cost them like any dish, plan quantities from last year's sales by day, and record what is left at the end of the evening; this is the month where waste moves fastest.

How a till helps

A spreadsheet can hold your recipe cards, but it cannot see each sale. A point of sale can. In CreekPOS, a product can carry a recipe: each sale takes the ingredients off stock, and a modifier such as extra cheese changes the quantities. Prep batches and waste are recorded in the same place, and the ingredient and food-cost reports show what sales should have used next to your stock movements. The details are on the features page, with stock tools under inventory.

Quick answers

Should I calculate food cost on the menu price or the net price? On the net price, after removing the 5% VAT. Otherwise every percentage looks better than it is.

What is a good food cost percentage? It depends on your rent, concept and volume. Many cafés aim for around 28-35%; what matters most is that you know your number and it stays stable.

How often should I update recipe costs? Whenever a main supplier changes a price, and at least once a month for fresh items.

Do staff meals count as food cost? Record them separately so you can see them. How they are treated in your books and for tax is a question for your accountant.

Want to see recipes and food cost on a real menu? Open the café demo or start a 14-day trial with your own dishes.