Your food cost is creeping up and nobody knows why

Sales are the same as last year. Maybe slightly better. And yet there is less money left at the end of the month, and nobody can point to the reason.

Food cost rarely jumps. It drifts, a percentage point at a time, from several places at once — which is exactly why it is hard to see and easy to ignore until it is serious.

Know your number first

Most Indian restaurants target food cost somewhere in the region of 25–35% of revenue, varying a lot by format: a bar or a cafe with high-margin beverages sits lower, a thali or buffet operation sits higher. The exact benchmark matters less than knowing your own number and whether it is moving.

Calculate it monthly:

Food cost % = (Opening stock + Purchases − Closing stock) ÷ Food revenue × 100

If you have never done this, the first month's number is not very meaningful. The second and third are, because you are comparing like with like. What you are looking for is the trend.

The five places it leaks

Portion drift. Nobody decided to serve more. But a new cook joined, nobody weighed anything, and the paneer portion quietly went from 120g to 150g. That is a 25% cost increase on your most-ordered dish, invisible to everyone. Portion drift is the single most common cause and the one owners most consistently underestimate.

Unrecorded wastage. Spoilage, over-prep at the end of a slow night, dishes returned and remade, staff meals that were never budgeted. If it is not written down, it does not exist in any calculation you make — but it is fully present in your closing stock.

Supplier price rises that never reached your menu. Your vegetable prices moved three times this year. Your menu price moved once, eighteen months ago. This is the leak that is completely outside your kitchen's control and entirely within yours.

Theft and unbilled consumption. Worth naming, but worth putting in perspective: in most restaurants it is a smaller contributor than portioning and wastage. Chase it after you have ruled the others out, or you will damage trust with your team for a fraction of the money.

Menu mix shifting. Your margins per dish did not change, but customers moved toward your lower-margin items — often because you promoted them, or because a delivery platform pushed them. Total food cost % rises with nothing wrong at the dish level at all.

Find your leak in two weeks, without software

Count stock weekly, not monthly. Same day, same time, same person, same sheet. Weekly counts turn a vague annual drift into a number you can actually act on, because the window is small enough to remember what happened in it.

Write standard recipes in grams for your top twenty dishes. Not all of them — the twenty that make up the bulk of your orders. Weigh what your kitchen currently serves, compare it to what you costed the dish at, and you will often find your answer in an afternoon.

Put a scale and portion scoops on the line. Cheap, unglamorous, and the most reliable fix for portion drift there is.

Keep a wastage book by the bin. Date, item, quantity, reason. Two weeks of honest entries tells you more than a year of guessing. Make clear it is for understanding cost, not for punishing people — or the entries stop being honest.

Re-check your purchase prices against your menu prices quarterly. Put it in the calendar. This is the leak that only the owner can close.

Where software takes over

The manual method works, but it takes discipline every single week, and it tells you what happened rather than what is happening.

Linking recipes to menu items in an inventory system means raw materials deduct automatically as dishes are sold. That gives you a theoretical stock level — what you should have — to compare against your physical count. The gap between the two is your real loss, quantified, without you having to reconstruct it from memory.

Low-stock alerts solve the separate problem of running out mid-service, which causes its own expensive emergency purchases at whatever price the nearest supplier is charging.

For pricing decisions, our recipe cost calculator is free and needs no signup — it works out the true cost of a dish and the selling price you would need at your target food-cost percentage.

The order to do this in

Weigh your top twenty dishes first. Start the wastage book on the same day. Count stock weekly for a month. In most restaurants, those three things surface the leak before you have spent a rupee on anything.