Costing basics 3 min read

Food cost percentage vs gross margin

Same data, two lenses. Use whichever your team thinks in naturally.

Food cost % and gross margin % describe the same relationship from opposite sides.

Food cost % = cost ÷ price. A lower number means more profit.

Gross margin % = (price − cost) ÷ price. A higher number means more profit.

If food cost is 30%, gross margin is 70%. They always add to 100%.

Restaurants traditionally speak in food cost. Retail and CPG businesses speak in margin. Use whichever your team already thinks in.

Try it on your own menu.

Cost a dish in minutes. No spreadsheets.