Your menu costing says what food should cost. A monthly stock take says what it did cost. The gap between the two is your food cost variance: money lost to waste, portioning, missing paperwork or theft. Count once a month, work out both figures, and put a euro value on the gap.
Actual and theoretical food cost
Theoretical food cost % comes from your recipes: each dish's plate cost multiplied by the number sold, added up and divided by food sales. It is what the month would cost with exact portions and no waste.
Actual food cost % comes from the stock take:
Cost used = opening stock + purchases − closing stock
Actual cost % = cost used ÷ food sales
The variance is actual % minus theoretical %. In euros, it is cost used minus theoretical % × sales. Work out food and drink separately: they run at different cost levels, and a problem at the bar can hide inside a good kitchen month.
How to count
- Same time every month. After service on the last night of the month, or before the first delivery the next morning.
- Same route every time. List items in the order they sit: walk-in fridge, freezer, dry store, bar. The count sheet should follow the shelves.
- Count in purchase units. Kilos, litres, bottles, pieces: the unit on the invoice, so the unit cost matches.
- Two people. One counts, one writes. In the sample bistro, Elena takes the kitchen and Lukas the bar.
- Part-used packs count. Record them as a fraction, for example 0.5 kg.
- Current prices. Value stock at today's unit costs, and update them when supplier prices change.
Decide once whether prepped items and the line fridges are part of the count, then do the same every month. A steady method gives months you can compare.
A worked example
Our sample bistro counts at the end of each month and logs every invoice net of VAT, from suppliers such as Fresh Meats Ltd, Green Valley Produce and Dry Goods Wholesale. Its theoretical food cost comes from its menu costing, and its alert line is 1.5 points: any gap above that is marked Check.
February, step by step: opening stock €1,245.44 + purchases €11,466.71 − closing stock €1,242.56 = cost used €11,469.59. Divided by food sales of €35,400, that gives an actual food cost of 32.4%.
| Food | Cost used | Sales | Actual % | Theoretical % | Variance | Variance (€) | Status |
|---|---|---|---|---|---|---|---|
| January | €11,766 | €38,200 | 30.8% | 29.5% | +1.3 pts | €497 | OK |
| February | €11,470 | €35,400 | 32.4% | 29.6% | +2.8 pts | €991 | Check |
| March | €12,582 | €41,800 | 30.1% | 29.8% | +0.3 pts | €125 | OK |
February stands out. Sales dropped from €38,200 to €35,400, while cost used barely moved, from €11,766 to €11,470. The 2.8-point gap is worth €991 in one month. Drink stayed inside its line, at 24.1% against a theoretical 23.1%. In March the food gap closed to 0.3 points.
Common causes of a variance
- Waste: over-prep, spoilage, plates sent back. A waste log shows which.
- Portioning: a heavier hand on the braised beef, a few grams at a time, across the best seller on the menu.
- Paperwork: an invoice entered twice, entered in the wrong month, or a credit note that never arrived.
- Staff meals not recorded: they use food and bring in no sales.
- Counting errors: a missed shelf, a wrong unit, an old price.
- Out-of-date costing: if recipe costs still use last quarter's prices, the theoretical figure is too low.
- Theft: check everything above first.
Start with the cheap explanations. A recount of the high-value lines, beef chuck, salmon fillet at €21 a kilo, duck legs and parmesan, takes ten minutes. The missing salmon is usually in the other freezer.
Count it and compare it in one workbook
The Stock Count & Food Cost Variance workbook lists every stock item by location in count order, with its count unit, unit cost, an opening count and a closing count for each month. A purchases tab logs every invoice, net of VAT, by date and category. Enter the month's food and drink sales and theoretical cost %, and the results tab shows cost used, actual cost %, and the variance in points and in euros for food and drink, marked OK or Check against your alert line, with a chart of actual against theoretical cost. It works in Excel, Google Sheets and LibreOffice.
Related
- Read: How to Calculate Food Cost per Plate
- Read: How to Measure Food Waste in a Restaurant Kitchen
- Also useful: Menu Profit Planner, plate costs and sales mix give you the theoretical cost %
Every template in Restaurant Notes is in the Complete Restaurant Collection: 25 tools in one download.