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What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
Food cost percentage is the cost of the food you used divided by your food sales, times 100. Monthly, that is (opening stock + purchases − closing stock) ÷ food sales × 100; per dish, it is the plate's ingredient cost ÷ its menu price × 100. Many operators aim for roughly the low 30s per cent, but treat that as an example and set your own target from your menu and prices.
If you track one number in a restaurant besides cash, track food cost percentage. It tells you whether your prices, portions and waste are under control. With food inflation still high, a plate that was profitable in January can be loss-making by October without anything on the menu changing.
The formula
- Monthly food cost %
- (Opening food stock + food purchases − closing food stock) ÷ food sales × 100
- Plate cost %
- Ingredient cost of one portion ÷ menu price × 100
Use sales before taxes you collect for others. In Lagos, the 5% consumption tax on restaurant sales is borne by the customer and passed to the state (LIRS, reported by TechEconomy, October 2023), so it is not food sales. Keep drinks separate: they usually have a different cost structure, and mixing them hides problems in the kitchen.
Purchases means every naira spent on food in the month, including market runs paid in cash and staff meals bought in. Record market purchases on the day with a receipt or a signed purchase note, because cash buys from open markets are the ones most often missing at month end, and a missing purchase makes your food cost look better than it is.
Worked example: one month
Example figures for a mid-sized restaurant.
| Line | Amount |
|---|---|
| Opening food stock (count on the 1st) | ₦850,000 |
| Food purchases in the month | ₦2,400,000 |
| Closing food stock (count on the last day) | ₦650,000 |
| Cost of food used | ₦2,600,000 |
| Food sales, excluding consumption tax | ₦7,800,000 |
| Food cost percentage | 33.3% |
Check: 850,000 + 2,400,000 − 650,000 = ₦2,600,000; 2,600,000 ÷ 7,800,000 = 0.333. The stock counts matter: without opening and closing counts you are only measuring purchases, which swing with bulk buying.
Worked example: one plate
A plate of jollof rice with chicken and plantain, costed at example prices:
| Ingredient (one portion) | Cost (example) |
|---|---|
| Rice | ₦450 |
| Oil, tomato, pepper, seasoning | ₦300 |
| Chicken portion | ₦1,400 |
| Plantain | ₦250 |
| Pack or garnish | ₦100 |
| Total plate cost | ₦2,500 |
At a menu price of ₦7,500, plate cost is 2,500 ÷ 7,500 = 33.3%. To hit a 30% target, the price would need to be 2,500 ÷ 0.30 = ₦8,333, so about ₦8,300 to ₦8,500. Alternatively, keep the price and cut cost: a smaller chicken portion or cheaper cut would bring the plate down. Cost every dish this way, and recost your top sellers monthly.
What a target range looks like
There is no official benchmark. As an example only, many full-service restaurants aim for a food cost percentage in roughly the high 20s to mid 30s, while quick-service outlets with cheaper staples may run lower. Your right number depends on your rent, staff costs and price point. What matters most is the gap between your theoretical food cost (from plate costings and what you sold) and your actual food cost (from stock counts). A gap of several points means waste, over-portioning or theft.
A quick theoretical versus actual check
Example figures. Your plate costings and sales mix say the month's food cost should have been 30.5% (theoretical). Your stock counts say it was 33.3% (actual). The gap is 2.8 percentage points. On ₦7,800,000 of food sales, that is ₦218,400 of food that left the kitchen without earning its price: 7,800,000 × 0.028 = 218,400. You will not get that gap to zero, because some waste is unavoidable, but you should know its size each month and whether it is growing. If it jumps after a change of cook, a new supplier or a new menu item, start your questions there.
When the number moves: what to do
Nigeria's food inflation was 19.59% year on year in September 2026, according to NBS figures reported by Voice of Nigeria. At that pace, ingredient costs can move faster than menus. When your food cost rises:
- Recost the top ten dishes at this week's prices.
- Check portions: weigh a few plates against the recipe card.
- Check waste: what was thrown away this week, and why? See cutting food waste and stock loss.
- Check receiving: are deliveries weighed and checked against the invoice?
- Then reprice if needed, and update the displayed menu first.
On that last point: section 115 of the Federal Competition and Consumer Protection Act 2018 says a business must not charge a consumer more than the displayed price. If you raise prices, change the menu, menu board and online listing before charging the new price. For pricing approaches, see how to price a restaurant menu.
What to check first
- Do you count food stock on the first and last day of each month?
- Is every dish on the menu costed per portion?
- Are drinks and consumption tax kept out of food sales?
- When did you last recost your best-selling dish?
Where Pryme fits
Restaurants with a Pryme Business Account can join Spaces, where customers may be offered a Loan on Spaces by Solid Allianze MFB to spend with merchants in Spaces. The Finance agent can prepare a monthly purchases summary for your food cost calculation.
Questions people ask
How do I calculate food cost percentage?
Take opening food stock, add purchases, subtract closing stock to get the cost of food used, then divide by food sales and multiply by 100.
What is a good food cost percentage for a restaurant in Nigeria?
There is no official figure. As an example, many restaurants aim for roughly the high 20s to mid 30s per cent, but set your own target from your costs and prices.
How do I price a plate of food?
Cost each ingredient for one portion, add packaging, then divide the total by your target food cost percentage. A ₦2,500 plate at a 30% target gives a price of about ₦8,300.
Should consumption tax be included in restaurant sales?
No. The Lagos consumption tax is collected from customers for the state, so leave it out of sales when calculating food cost percentage.
Sources
- Voice of Nigeria: Nigeria's headline inflation drops to 14.63 per cent (16 Oct 2026) · accessed Oct 2026
- TechEconomy: LIRS tasks businesses on 5% consumption tax compliance (Oct 2023) · accessed Oct 2026
- Section 115, Federal Competition and Consumer Protection Act 2018 (LawGlobalHub) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.