Rising prices of chicken, oil, flour and gas have squeezed every restaurant in Pakistan. Most owners respond by raising menu prices, but customers notice quickly. The faster win is usually inside the kitchen: controlling food cost, the share of every sale you spend on ingredients.
This guide explains how to calculate food cost, what a healthy number looks like, and eight practical steps that work for dhabas, cafés, BBQ spots, pizza shops and fine-dining restaurants alike.
What is food cost and how do you calculate it?
Food cost percentage tells you how many rupees of ingredients you use for every Rs 100 you sell.
Food cost % = (Opening stock + Purchases − Closing stock) ÷ Food sales × 100
Example: you start the month with Rs 300,000 of stock, buy Rs 1,200,000 more, and end with Rs 250,000 left. You used Rs 1,250,000 of ingredients. If food sales were Rs 3,800,000, your food cost is about 33%.
Most well-run restaurants aim for roughly 28–35%. Fast food and pizza can be lower; steak and seafood are usually higher. More important than the exact number is the trend: if it creeps up month after month, money is leaking.
Where restaurants lose money
- Over-portioning: an extra spoon of chicken on every karahi adds up to kilos a week.
- Waste and spoilage: prepped food that is thrown out at night, or stock that expires in the cold room.
- Theft and unbilled orders: food leaving the kitchen without a bill, or staff meals that are never recorded.
- Supplier creep: prices that rise a little every delivery without anyone checking.
- Menu items that don't pay: popular dishes that sell well but barely make a profit.
8 ways to reduce food cost
1. Write a recipe card for every dish
List the exact grams of every ingredient for each menu item, and what that costs today. Once you know a chicken handi costs Rs 520 to make and sells for Rs 1,400, you can make real decisions instead of guessing.
2. Standardise portions
Use scales, ladles and portion cups. Train every cook to the same recipe. Portion control alone often brings food cost down by a few percentage points.
3. Count your key stock daily
You don't need to count everything every day. Pick the 10–15 most expensive items (chicken, mutton, beef, cooking oil, cheese, rice) and count them every night. Compare what you used with what you sold. A big gap means waste, over-portioning or theft.
4. Never let food leave the kitchen without a bill
Every order, including staff meals and complimentary dishes, should be entered so it can be tracked. A POS that sends orders straight to the kitchen printer makes this the default: no ticket, no cooking.
5. Order based on sales, not habit
Look at what you actually sold last week, by day. Fridays and Saturdays need more; Monday lunch needs less. Ordering to real demand cuts spoilage immediately.
6. First in, first out
Label every container with the date and use the oldest stock first. It sounds basic, but it is where many kitchens lose money in summer.
7. Review supplier prices every month
Keep a simple list of what you pay for your top 20 items. When a price jumps, ask for quotes from one or two other suppliers. Even Rs 20 per kg on chicken is a large sum over a year.
8. Engineer your menu
Sort dishes by how many you sell and how much profit each one makes. Promote high-profit dishes, re-price or re-design popular low-profit ones, and drop the dishes that neither sell nor earn.
How a restaurant POS helps
Doing all of this on paper is hard to keep up. A restaurant POS like Kashio does most of it automatically:
- Every sale deducts ingredients from stock using your recipe cards.
- Kitchen orders print only after the order is entered, so nothing leaves unbilled.
- Daily reports show what was sold, what stock should be left, and best and worst sellers.
- Purchase records show supplier price changes over time.
Food cost control is not a one-time project. It's a habit of measuring, comparing and correcting every week. Start with recipe cards and a daily count of your expensive items, and you will see the difference within a month.
Want to see your real food cost? Try Kashio free for one month. Our team sets up your menu and recipes for you.