The first and obvious item is the food the consumer receives on their plate. This food costs a certain amount of money to the restaurant and hopefully that is less than thirty percent of what the customer is paying for their meal. Another area that should be included in food costs are the items used to prepare the food. These items are things like grease for the grill or the flour that is used to roll out biscuits. These items are a very small percentage of food costs, but cutting this corner even slightly can add up in terms of actual dollars very quickly.
Food has a very short and definite shelf life.
The amount of food spoilage that occurs in a restaurant must be kept to a minimum. This is a very simple idea, the less food that spoils the less food the restaurant is throwing away. The processes of reducing spoilage will be discussed in greater detail later on. The last area of food cost we will discuss is an area that has the potential to bring a restaurant to its knees if management is not careful. This area is employee related shrinkage.