What is the average food cost percentage for restaurants?

In the restaurant industry, the average food cost percentage typically ranges between 28% and 35%. Choosing 28% as the average food cost percentage reflects industry trends where many establishments aim for a balance between cost-efficiency and quality. This percentage indicates that for every dollar generated in revenue, approximately 28 cents are spent on food costs.

Maintaining a food cost percentage around this figure helps restaurants manage their expenses while still providing a quality dining experience for customers. It is important for restaurant owners and managers to closely monitor their food costs to ensure profitability and sustainability, adjusting pricing and purchasing practices as necessary to maintain this balance.

In contrast, other percentages outside of this range may indicate issues with pricing strategies, supply costs, or menu offerings that can significantly impact a restaurant's profitability. A target below 28% might suggest that a restaurant is not utilizing quality ingredients or is not operating efficiently in terms of cost management. Meanwhile, a percentage above 30% may signal that the establishment is experiencing high food costs relative to its sales, which could require strategic adjustments to maintain financial health.