Tools

Food GP Calculator: Dish Cost, Yield Loss and Real Margin

A food GP calculator that accounts for the two things that make kitchen margin different from bar margin: a dish cost you have to build from a recipe, and yield loss between what you buy and what reaches the plate.

Alex Riesenkampff

August 21, 2026 · 6 min read · Markdown

Food GP uses the same formula as every other GP, on the ex-VAT price. Two things make a kitchen harder than a bar: the dish cost has to be built from a recipe before the sum can mean anything, and a meaningful share of what you buy never reaches a plate. Cost a dish on its purchase weight and a £12.50 plate looks like 73.1% GP. Cost it on what actually gets served, with 8% yield loss, and it is 70.8%.

The fear that stops most kitchens acting on any of this is volume: put the price up, or change the dish, and the covers walk.

It is worth having one measured case in mind. At a neighbourhood café in Germany, Super44 tracked a menu swap from a panini to a kimchi sandwich at a higher price. The new item kept about 91% of the old item's volume and took the line from €79 a week to €104. Nine percent of the sales of that item went. A third more money came in.

One swap at one café is not a law of nature. It is a reminder that the volume answer is measurable rather than something to be feared in the abstract, and that you only find out by changing one thing and watching the till.

Why food carries VAT that a shop version would not

The VAT step catches people out on food more than on drink, because the intuition from retail does not carry over. Under VAT Notice 709/1, supplies made in the course of catering are standard-rated. That pulls in food which would be zero-rated if you sold it another way.

A sandwich in a supermarket chiller and the same sandwich on your counter are not taxed alike. So the whole ex-VAT step applies to your menu, and a menu price is 20% larger than the revenue it produces.

Yield loss is the number people leave out

If you cost a dish on the weight that arrives on the invoice, you are costing a portion you did not serve. Trim, peel, bone, cooking loss and thrown portions all sit between the two.

The effect is smaller than most people expect on any one dish and larger than they expect across a menu. Eight percent loss on £2.80 of ingredients is 24p. On a £12.50 plate that is a little over two percentage points of GP, and two points across every dish on a menu is the whole argument for costing recipes properly rather than annually.

It is also, on the published evidence, the biggest single place food money goes missing. WRAP's study of the sector, published in November 2013, found that "On average 21% of food waste arises from spoilage; 45% from food preparation and 34% from consumer plates." Preparation is the largest slice, and it is the slice this box is measuring. WRAP put the sector's total at "920,000 tonnes of food is wasted at outlets each year, 75% of which is avoidable", costing an estimated £2.5 billion a year on a 2011 basis, and equivalent to "one in six of the 8 billion meals served each year".

Two things follow. The first is that a yield-loss figure is not a rounding adjustment, it is the main event. The second is that most of it is not inevitable: three quarters of that waste is classed as avoidable, so the number in the box is not a fact about your ingredients, it is a description of your prep.

The figure to put in the box is therefore not a guess if you can help it. Weigh what comes in and what goes out on a handful of your highest-volume dishes for a week and use the real number. A single measured week beats a plausible assumption applied forever, and it tells you which half of that 45% is yours.

GP and food cost percentage are the same number

Food cost percentage is cost over sales. GP percentage is gross profit over sales. They add up to 100, so a 30% food cost is a 70% GP, and there is no need to convert between them beyond subtracting from 100.

Which one you use tends to be decided by who asked. Suppliers and menu-engineering guides talk in food cost percentage. Pub companies, stocktakers and accountants talk in GP. They are the same pair of numbers wearing different hats.

On what to aim for, there is one published figure and it is better than the ones you get quoted. UKHospitality and Christie & Co put gross profit margin on food sales at 67% across the whole survey, from 4,791 managed outlets, in a report its publishers describe as the only one in the industry built from members' actual profit and loss accounts rather than assumptions. Compare yourself to it with two things in mind: the data covers the six months to December 2021, and the report attributes that period's food margins partly to the temporary hospitality VAT reduction. A number measured while hospitality VAT ran at 5% and then 12.5% is not a target for a kitchen paying 20%.

The 65-70% ranges circulating elsewhere are software-vendor blogs, and we could trace no primary source under them. Our menu pricing guide reached the same conclusion from the food cost side, and makes the case for contribution margin in pounds as a more useful question than a ratio.

For a single line without the recipe step, use the GP calculator. For drinks, where cost per serve is set by your house measure, use the drinks GP calculator. And GP is only half of what decides whether a kitchen works: prime cost puts it together with labour, which is the pairing that predicts trouble.