Ask any restaurant owner what keeps them up at night, and chances are food costs are near the top of the list. Margins are thin, and one bad month with inventory or waste can wipe out profits.
The tricky part? Cutting food costs without cutting quality. No guest wants smaller portions or watered-down recipes. What you need are smarter systems—ways to trim expenses quietly in the background while keeping customers happy.
I’ve seen restaurants shave 8–10% off food costs by tightening up the basics. Real savings you can feel. Let’s walk through five practical ways to get there.
1. Keep Tabs on Your Numbers
You can’t fix food costs if you don’t know what they are. Too many operators “go with their gut” and assume they’re fine. That’s a mistake.
Start with the formula every manager should have on repeat:
(Cost of Goods Sold ÷ Food Sales) × 100 = Food Cost %
Example: if your restaurant pulls in $50,000 in food sales and spends $17,500 on ingredients, you’re at 35%. Not awful, but most concepts should be closer to 28–32%.
And here’s where most folks slip: they only check once a month. By then, you’re weeks behind the problem. Do it weekly. Compare your actual cost with your theoretical cost (what it should be if every recipe and portion is followed). If there’s a gap, that’s where waste, theft, or sloppy portioning are eating into profits.
2. Push Back on Your Vendors
Your vendors expect you to negotiate. If you’ve been ordering the same way for years without asking questions, you’re probably paying more than you need to.
- Ask about price breaks on bulk or loyalty.
- Lean into seasonal produce—it’s usually cheaper and makes your menu sound fresher.
- Shop quotes with more than one supplier before committing.
Even shaving a dime off an item adds up. Save $1 on a pound of chicken, multiply that by hundreds of portions a week—you’ll see why this matters. And please, order to your budget. Loading up the walk-in with product you won’t move is a fast way to burn cash. Ordering only what you need from your food products supplier keeps waste down and cash in your pocket.
3. Get Real About Portion Control
This is where restaurants quietly bleed money. You train staff to serve six ounces of protein, but in the middle of a rush, someone scoops out eight. Repeat that a hundred times and you just gave away a case of product.
- Scales, scoops, and ladles—make them non-negotiable.
- Recipes with exact measurements, posted where staff can see them.
- Training until it becomes habit.
It’s not about short-changing customers—it’s about consistency. Guests expect their favorite dish to look and taste the same every time. Portion control is one of those “boring” moves that saves real money over the long run.
4. Waste Less, Use More
Throwing food in the trash? That’s throwing away profit. Spoilage, over-prepping, forgetting FIFO—it all adds up.
Step one: stick to First In, First Out (FIFO). Old stock gets used first, newer stock waits its turn. Label and date everything.
Step two: use tech. Stop walking around with a clipboard. Modern restaurant POS software can tie sales directly to inventory. You’ll know what’s moving, what’s sitting, and when it’s time to reorder—without guessing.
Step three: get creative with product that’s close to the edge. Mushrooms and spinach about to turn? Run a “Chef’s Flatbread” or soup of the day. Guests get something new, you move product, and nothing goes to waste.
5. Make Your Menu Work Harder
Not every dish deserves a spot on your menu. Some items are money makers; others are dead weight. The trick is knowing which is which.
- Stars: Popular and profitable—feature them front and center.
- Plowhorses: Popular but low profit—nudge pricing up or adjust portions.
- Puzzles: High profit but low sales—rebrand, reprice, or reposition on the menu.
- Dogs: Low sales, low profit—cut them.
Menu design matters, too. Guests’ eyes land in predictable spots (top-right corner, highlighted boxes). Put your high-margin items there. Use smart descriptions that make the profitable choice irresistible.
Bonus: Restaurant Software = Time + Money Saved
Let’s talk about the elephant in the room: spreadsheets. If you’re still calculating food costs in Excel, you’re wasting time. It works—technically—but it’s clunky, error-prone, and doesn’t update when prices change.
The smarter move is a restaurant management software solution. These systems do the heavy lifting:
- Automatically track recipe costs and food cost percentages.
- Forecast budgets using real invoices and sales data.
- Set par levels and low-stock alerts so you never miss orders.
- Keep inventory updated with invoice importing.
- Create audit trails so theft doesn’t slip by unnoticed.
In restaurant lingo, that means your front- and back-of-house finally work in sync. And no—it’s not as intimidating as it sounds. If you can use a smartphone, you can handle today’s software. Once it’s set up, you’ll wonder how you ever ran your restaurant without it.
Not sure where to begin? You can compare restaurant POS systems here and find one that fits your style and budget.
Final Word
Food cost will always be a challenge, but it doesn’t have to drain your profits. Watch your numbers closely. Push vendors for better deals. Keep portions tight. Waste less. Make your menu smarter.
And if you’re serious about saving both money and time? Stop fighting with spreadsheets and let the software do its job. Do that, and you’ll have more breathing room to focus on the fun stuff—like building a restaurant guests love coming back to.
