One of the most important key figure in the restaurant business is the material cost. This indicator expresses the ratio of food or beverage costs to price or sales. But how do I calculate the cost of materials and how high should my cost of sales ratio be?
Calculation of material costs
To calculate the cost of materials, you only need two values: the net consumption of goods and the net sales. The net consumption of goods corresponds to the amount you spend for the purchased goods. You get the cost of materials ratio by comparing the net cost of materials to the net sales.
How high should my material costs ratio be?
Ideally, this value is below 30%. The collection of guideline values from the tax office in Germany indicates that the average cost of goods for restaurants, pubs and bars is 28%. However, the range here can vary from 20% to 35% or more. So if your cost of materials ratio is in this range, everything is fine at this point.
How can I optimize the material costs?
For the restaurant industry, the cost of materials is one of the largest cost blocks. So, how can you optimize the use of goods to save costs? Here, we’ve listed a few tips that can help you lower your cost of materials ratio.
Avoid waste and make sure you have the right portion sizes: First, you should ask yourself which goods and really needed and which are not. Portion size also plays an important role here. Often too much is bought, because one believes to have everything always immediately ready. But this is usually not necessary and only leads to high costs.
Optimize your shopping: The shopping itself can also be optimized, for example by comparing prices or looking for discounts.
Adjust your menu: By analyzing your food and drinks, you can determine which dishes are in regular demand and which are not. For those that are rarely or never ordered, you should consider removing them from the menu altogether.