Analyzing Your Food Cost

Ron Gorodesky, President of RAS, maintains that successful restaurants generate food costs in the low to mid 30's. However, different types of restaurants typically run higher or lower percentages - steak houses may run up to 40% whereas Italian restaurants may run about 28%.

Comparing your cost percentage to restaurants with similar menus and service levels provides a more accurate perspective. The 1995 Pennsylvania Restaurant Operations Report, published by RAS in conjunction with the Pennsylvania Restaurant Association, provides industry information and food cost averages based on menu-theme, sales volume, years in business and other categories.

For example, the report lists an average food cost of 35.7% for American/Regional menu theme restaurants and 32.0% for a restaurant in a multi-unit organization.