Intelligently experiment with new recipes Keeping an eye on farming trends and even international trade negotiations – the 2018/2019 US-China trade war has had a huge impact on American farmers – is an important part of understanding and managing inventory costs.Ĥ. Bakeries and other restaurant concepts with an emphasis on desserts and baked goods felt the impact of this shortage. In 2018, a poor growing season left the world with a shortage of vanilla, making the price for the spice skyrocket. Better understand how food supplies impact costs and profitability Menu engineering based on food cost percentage will give you the insights you need to decide whether to retire, change, or re-price a menu item.ģ.
#Excel bakery costing template update
With food cost percentage data integrated in your point of sale, you can update menu items that are no longer profitable. From there, you’ll know which menu items are most profitable and, in turn, which items to promote. Here are four benefits to calculating restaurant food cost percentage.īy pricing each menu item based on food cost percentage and cost of goods sold, you will ensure that each menu item fits within your food cost margins. For example, if McDonald’s sells 68 million burgers a day, and they are off by a single penny on their cost of goods sold, then they’re losing $680,000 per day… or $248 million per year. The most successful franchises and restaurant chains also understand the value behind keeping a close eye on food costs. Taking the extra step to calculate food cost percentage and cost of goods sold down to the individual cookie, slice of bread, or burger helps your restaurant in the long run. If she doesn’t pay attention to her food costs, and her menu items are incorrectly priced by 75 cents, Josephine could lose $100,000 in revenue per year.īasically, pocket change can quickly add up.
Let’s say that Josephine runs a successful restaurant that serves 350 customers per day. In short, restaurant food cost percentage is important because keeping a close eye on and optimizing food cost percentage can help you achieve maximum profit. Why is Food Cost Percentage So Important?