Food Cost Is the #1 Profit Killer
For most restaurants, food costs represent 28-35% of revenue. Even a 2% reduction can mean thousands of riyals in additional profit per month.
Calculating Food Cost Percentage
Food Cost % = (Cost of Ingredients / Menu Price) × 100
If a dish costs 15 SAR in ingredients and sells for 50 SAR, your food cost is 30%. Aim for 28-32% for most items.
How Your POS Helps Control Costs
- Recipe Costing: Enter ingredients for each menu item. The POS calculates exact cost per dish.
- Waste Tracking: Log every wasted item — spoiled ingredients, wrong orders, dropped plates.
- Portion Control: Standardize recipes so every dish uses the same amount of ingredients.
- Menu Engineering: Identify high-profit vs low-profit items. Promote the profitable ones.
- Supplier Price Tracking: Monitor ingredient prices over time. Negotiate when prices spike.
The Menu Engineering Matrix
Classify every menu item into four categories:
- Stars: High profit, high popularity — keep and promote
- Plowhorses: Low profit, high popularity — increase price or reduce portion cost
- Puzzles: High profit, low popularity — better placement or marketing
- Dogs: Low profit, low popularity — remove from menu