A major part
of prime cost is food cost. Food cost can be calculated as follows:
food purchases/ Net food Sales
after the change in inventory)
the menu is crucial to controlling food costs. The easiest place to begin
is at the bar due to price control. From there, move on to the food. Each
category should be broken down into more useful ratios. Have the chef
or sous chef cost out the menu since they deal the most with the product.
A few tips to help lower food costs are:
out the menu and price the high cost percentage items accordingly.
waste in the kitchen. Track waste as well.
prep staff. Make sure the pre-cut portions weigh what they are supposed
the chefís pay to a pre-set food cost percentage. Set up an incentive
deal for the chef.
up Purchase Order System.
prices with vendors for bulk buying. Take vendor discounts when offered.
the storage room and keep inventory to a minimum.
based on a budget.
If food cost
is a consistent problem, an operator should start taking inventory weekly.
At one particular restaurant, the operator requires his kitchen staff
to know daily food cost. He ignores inventory and uses purchases over
sales. He even makes the kitchen track each entree sold. So if only one
lobster is sold, the staff better not order lobster the next day. Any
operator can take this one step further by tracking daily sales and purchases.
A dollar budget can be set based on projected demand. For example, if
an operator expects to do $50,000.00 in food sales for the week, the chef
should be given a budget of how much to spend. If the operatorís food
cost goal is 30%, they can order $15,000.00 worth of food ($50,000 x 0.3).
If the operator tracks purchases daily, he or she can let the chef know
how close he is to the budget.