Restaurant Report - For Profit's Sake, Inventory Your Food Cost!

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For Profit's Sake,
Inventory Your Food Cost!
by Ron Gorodesky and Kate Lange

The food is great, the service fabulous and the restaurant is busier than ever - but are you wondering why the bottom line isn't all it should be?

Check your FOOD COST. A vital ratio - key to the success of any restaurant as it directly impacts profitability. A profitable restaurant typically generates a 28%-35% food cost. Coupled with labor costs, these expenses consume 50%-75% of total sales. Because of the impact food cost makes on an operation, food cost is one of the first things we examine at a troubled property. Beyond the bottom line, food cost also reflects an operation's food quality, value provided to the customer, and management skill level.

The full version of this article is now available on Restaurant Report's membership site RunningRestaurants.com.

Click here to go to the article page.