Food cost and labor percentage

[bouldercreekpizza]

Hey folks, An accountant friend of mine is evaluating a pizza/sub restaurant and is trying to get a range of food and labor cost such place may expect including paper products and chemicals. The shop probably does 60% pizza sales. My operation is a mobile by the slice gig and isn’t comparable.
As it stands now both food and gross labor are about 35% each. This seems quite high to me.
I’m also looking at the invoices evaluating price points.
What are people paying for Gold Medal full strength flour 50#. The shop buys 50 sacks at a time and is paying $18.20. Does this seem in line?

 

[paul7979]

Re: Food cost percentage

418.20 is a bit high at this time. Our flour recently dropped below $15 but has been hovering in the high $16 range for a bit. As far as where overall food cost should be, it depends on the business model. A lower price point will dictate higher food costs but hopefully drive volume to lower other costs as a percentage of sales. I would throw out 20% to 33% as a range.

 

[bouldercreekpizza]

Re: Food cost percentage

Thanks Paul. He said the present food cost is 35% and gross labor is 35% but the place isn’t being managed. Labor seems very high to me.
As far as food cost, no one at the shop has priced anything for over 3 years and I think the sales people understand the situation. The shop goes through 50 sacks of flour a week and at that volume you’d expect better pricing(there is wholesale dough production also). I’m going through the invoices and some things jump out.
For instance, only provolone cheese is used-no Mozzarella. Has anyone heard of topping a pizza with provolone only?

 

[NicksPizza]

Re: Food cost percentage

bouldercreekpizza:

For instance, only provolone cheese is used-no Mozzarella. Has anyone heard of topping a pizza with provolone only?

Might explain some of the food costs, though. I’m most familiar wit provolone being mixed into mozz up to 50/50. Can’t say I’ve seen it straight on pizza . . . sandwiches, yes.

 

[system]

Just going off basic math… if they are using 2500lbs of flour a week… and not knowing their sizing… just an estimate is anywhere from 1500-3000 dough balls a week. This could translate into $1 to $3 million a year in just their 60% pizza sales depending on price and quality factors. If you can…fill in the blanks about what they really offer and that might warrant some more accurate answers as too where costs could or should sit at. The only prov cheese item is unusual also…not to mention more expensive. Fill in and lets see what is really going on here?