Any deviation affects your gross profit.ĭownload Your Free Copy Why does a difference between actual and ideal food cost result in a loss of profit? To control food cost you compare the actual food cost with the ideal food cost. In a perfect situation, the variance is zero. A food cost variance is expressed as a percentage from turnover in a specific period. What is food cost variance?Ī food cost variance signifies ideal food cost is different from actual food cost. The impact of food cost on gross profit is unquestionably substantial.īy avoiding unnecessary losses on food cost, the profit increases exponentially without having to generate extra income.
The average food cost percentage in restaurants is approximately 35% of turnover. If the actual food cost in your restaurant or hotel is higher than the ideal food cost (aka theoretical or target food cost), the reason for this can always be traced back to one or more of these seven causes: Food cost control is crucial for profitability in hospitality. You need to know how to calculate food cost accurately.
