Dollars, not percentages: the food cost number that actually pays the rent

Percentages are useful because they compare cleanly across periods and volumes. They are dangerous because rent, wages, and loan payments are settled in cash, and a percentage tells you nothing about how much cash a dish actually produced.

A worked example

A salad costs £2.40 and sells at £9 — 27% food cost, £6.60 of cash margin. A short rib costs £8.50 and sells at £26 — 33% food cost, £17.50 of cash margin. On percentage, the salad wins and a spreadsheet would tell you to push it. On cash, the short rib is worth nearly three salads. Sell twenty of each and the difference is £218 in one service.

Margin times menu mix

The figure that matters is cash margin multiplied by units sold, per item, per period. That single column ranks your menu by what it contributed to the bank rather than by how efficiently it used ingredients.

• Rank every item by total cash contribution, not by food cost percentage.
• A high-percentage, high-cash item is usually worth protecting, not re-engineering.
• A low-percentage item that sells three plates a week contributes almost nothing — efficiency on a dish nobody orders is not a win.
• Watch what happens to cash contribution after a price change, not what happens to the percentage.

Where the percentage still earns its place

Keep the percentage for period control — comparing this month to last, spotting waste and portioning drift, and benchmarking against your own history. Use cash contribution for every decision about an individual dish: what to promote, what to reprice, what to cut, and where to put the best line on the menu.

In tight-margin conditions, small improvements in food cost produce outsized profit gains — but only if you are improving the items that actually move money. le mezon's Stars & Dogs view ranks your menu on cash contribution and popularity together, so the promotion decision is made on the number that pays the rent.