Food cost control: theoretical versus actual, and the gap between

There are two food cost numbers and the distance between them is where your margin goes.

Theoretical food cost: what your recipes say you should have used, given what you sold. Your POS can calculate this if your recipes are costed.

Actual food cost: opening stock + purchases − closing stock, divided by sales. This comes from counting.

If theoretical is 29% and actual is 35%, you have a six-point gap. On SAR 400,000 of monthly sales that is SAR 24,000 a month, and it has four possible causes.

Cause 1: the recipes are wrong

The most common, and the least investigated. Recipes get costed once, at opening, and then ingredient prices move.

Find it: re-cost your top ten dishes against this month's actual supplier prices. If the theoretical number moves materially, the gap was never real — you were measuring against a stale baseline.

Fix it: re-cost quarterly, and immediately after any significant supplier price change.

Cause 2: over-portioning

The chef's "generous" hand. Usually unconscious and always expensive.

Find it: a yield test. Take a dish, have the kitchen make ten as they normally would, weigh the key ingredient in each, and compare to the recipe. A 15% average over-portion on a protein is common and is enormously expensive.

Fix it: portion scales at the station, and standardised scoops and ladles. Not a lecture — tools.

Cause 3: waste

Spoilage, over-production, mistakes, trim.

Find it: a waste log for two weeks. Every item thrown away gets written down with a reason. Nobody enjoys this and it is the single most informative fortnight you can spend.

Fix it: the log tells you. Usually it is over-production of one or two prepared items, or a delivery cycle that brings in more fresh product than you use before it turns.

Cause 4: theft

Product leaving without a sale.

Find it: compare the waste log and the yield tests against the remaining gap. What is left after the first three causes are quantified is what needs investigating. Look for patterns by shift and by product — high-value, easily-carried items first.

Fix it: controls before accusations. Seepreventing till theft.

The weekly routine

Monthly is too slow. Weekly:

1. Count your top 20 ingredients by value. Not everything — the 20 that represent most of your food spend.
2. Calculate actual for those 20 against the week's purchases and sales.
3. Compare to theoretical from the POS.
4. Look at the three biggest variances only. Not the whole list.
5. Write down what you did about them.

Forty-five minutes a week. It is the highest-return recurring task in a restaurant.

What your POS has to do

• Hold costed recipes, including sub-recipes — a sauce used in four dishes
• Deduct ingredients on sale, so theoretical usage is calculated automatically
• Support stock counts with a variance report
• Record waste with reasons
• Report theoretical versus actual per period

Without costed recipes, none of this works, and most restaurants that struggle with food cost are struggling because that one piece of setup was never completed.

The Saudi specifics

Ramadan changes everything — volumes, timing, waste patterns, and the buffet model if you run one. Track it as its own period; comparing Ramadan to a normal month tells you nothing.

Supplier price volatility on imported items can move a dish's cost sharply within a quarter. Re-cost after any big move.

Family portions are larger and harder to standardise. Yield tests matter more, not less.

More on Wameed's inventory and recipe costing on thefeatures page.