Food Cost

[timbo1420]

Hi, my first post. My question pertains to food cost. With true food cost do you include supplies like, pizza boxes, salad containers, paper bags, etc. What about fountain drink costs, should all these be included with your total food cost numbers. Any help would be appreciated! Also I have heard that the “magic number” for combined food/labor cost should be around 55% of sales. Is that about right? I currently own a small pizzeria in Orange County, Ca. Thanks again for your time!

 

[NicksPizza]

Welcome to the forum. Be ready for all sorts of ideas and information and pionts of view here in our little part of the internet world. Great ideas sometimes come . . .alwats lots of useful stuff.

As for me, I include all products that it takes to produce the item that goes tothe customer. If the pizza goes into a box, that is added, if a foil sheet, souffle cup for sauce, foam container, paper towel, portion bag . . . whatever. Ifit is required to get the product to the customer, I add it. That gives me a clear idea what itr actually costs me to give that pizza to that customer. If I put the boxes/containers in another line item, then I get less accurate picture.

That said, if I were a 60% or so dine-in facility, then the packaging becomes less obvious as a COGS, and more an adjunct cost. Others’ mileage may vary.

 

[indie_pizza]

I think it varies by the person and how they want to define the term. I include things like pizza boxes in my food cost calculation.

55% is a pretty good number for the two. 60% is my magic number, if I go above that I’m probably not going to get paid.

 

[ScoreboardpizzaCo]

Are you guys saying that you run 60% food costs? Like if you sold 10k in food you would have 6k in costs? I’m pissed that i am running 24%…

I include everything except beer I run that different because sometimes its $1 drafts sometimes its normal…etc.
We are 60% dine in 30% carry out and 10% delivery. Haven’t figured how to crack the delivery nut yet.
Casey

 

[Daddio]

ScoreboardpizzaCo:

Are you guys saying that you run 60% food costs? Like if you sold 10k in food you would have 6k in costs? I’m pissed that i am running 24%…

I include everything except beer I run that different because sometimes its $1 drafts sometimes its normal…etc.
We are 60% dine in 30% carry out and 10% delivery. Haven’t figured how to crack the delivery nut yet.
Casey

If I read the post right the 60% refered to food and labor combined.

 

[ScoreboardpizzaCo]

I see it now… doh… that still seems high to me… I feel that anything over 50% comes out of the money that should be your profit… stay on top of that labor and the food sales reps. I have seen some of the houses that the food sales reps have here in California, they have a decent margin.

Casey

 

[PicassosPizzeria]

I keep our labor cost below 15% of gross sales. 10 % is ideal and COGS around 30 %… so roughly 45% is COGS and Labor combined at the most. Since our government imposed a $10.25 minimum wage (we are just take out) the labor cost have increased substantially.

I could understand an eat in would have a larger percentage as it is more labor intensive to service in an eat in environment