How to calculate restaurant food cost in Australia
Most Australian venue owners can quote a food cost percentage.
Fewer can tell you whether that number is theoretical, actual, or a guess from last month's invoices.
I recosted a Fremantle cafe that swore they were "around 30." They were at 36% once yield, staff meals and a real weekly stocktake were in the maths.
On $80,000 a month of food revenue, that 6% gap is $4,800. Every month. That is the food cost conversation in Australia. Not a vibe. A method.
What restaurant food cost percentage should be
Hospo22 uses these working bands for Australian independent venues:
Cafe: 28-32%
Casual dining: 30-35%
Fine dining: 32-38%
Beverage is separate. Liquor 20-28%. Coffee 18-24%. If you mash food and coffee into one "cost of goods" number, you will hide a kitchen problem or a pour problem.
These are not Fair Work figures and they are not a promise. They are the bands I use when a Perth, Melbourne or regional WA room asks whether they are in trouble.
Theoretical vs actual (this is the whole game)
Theoretical food cost is what the recipes say you should have used, at current supplier prices, with real yield. A kilo of brisket is not a kilo of saleable meat. If you skip yield, the percentage is a story.
Actual food cost is opening stock plus purchases minus closing stock, divided by food revenue, for the same week.
Variance is the gap. Over 3%, you have a process problem: portioning, waste, staff meals, theft, or a stocktake that is theatre.
Most rooms in Australia calculate "food cost" from purchase invoices only. That tells you what left the supplier. It does not tell you what left the pass.
How to calculate it this week
Pick one week. Not a quarter. A week.
Cost the top 15 selling dishes with purchase price and yield. Not the whole 86-line menu on day one.
Stocktake the ten highest-value items at the start and end of that week. Same person, same method.
Add staff meals and known waste into actual, or you will flatter yourself.
Divide actual food COGS by food revenue. Compare to theoretical.
If you have never put a scale on the two brunch dishes everyone plates by eye, start there. Recipe costing as a standalone if you want it done properly. An operations audit includes food cost as one of four pillars.
Why monthly stocktake is too late
A monthly stocktake feels organised. It is always chasing a number from three weeks ago. A 2kg salmon variance on a Tuesday is gone by the BAS.
Weekly on the items that move money. Full monthly if you must, but do not pretend the monthly is how you steer.
Perth, Melbourne, Bali
Supplier prices move. A Melbourne bistro and a Perth cafe can share a target band and still need local invoices in the costing file. Bali is worse if you cost in AUD and pay in rupiah. Same method. Different currency in the file before the menu goes to print.
FAQ
What is a good food cost percentage for a cafe in Australia?
28-32% is the band I use, if the recipes have yield and you are not stuffing barista milk into food COGS.
How often should a restaurant do a stocktake?
Weekly on the ten items that move money. Monthly full counts do not catch a Tuesday variance.
Can I calculate food cost from Xero bills alone?
No. Bills are purchases. Food cost needs stock movement and yield.
If the number you quote at dinner and the number in the cool room are different, that is a 30-minute call. Book a time.
