Prime cost, in plain words
Food plus staff, as a share of sales. The one number that tells you early whether a month is going well.
By Goutham Sudini · November 4, 2026 · 1 min read
Prime cost is what you spent on food and drink, plus what you spent on the people who made and served it. Divide it by your sales and you get a percentage. It's the biggest share of where your money goes, so it's the one to watch first.
Working it out
Take a week. Add up the food and drink you bought or used, and your wages, including the owner's if you pay yourself. Divide by that week's sales. If you spent $6,000 on food and $5,500 on staff, and sold $19,000, your prime cost is $11,500 ÷ $19,000, or about 61%.
What's a good number?
Many full-service restaurants aim to keep prime cost somewhere around 60 to 65% of sales; quick-service places often aim lower. Your own target depends on your rent, your menu and your prices. What matters most is that you know yours, and notice when it drifts.
Splitting food cost from labor
Watching the combined number helps, but separating food and labor weekly tells you where to act. If food jumped three points while labor stayed flat, check supplier invoices and waste before cutting a shift. If labor climbed during slow Tuesday lunches, look at prep schedules and overlap hours.
Why weekly beats monthly
By the time a monthly statement arrives, a bad month is over. Checked every week, or every morning, a rise in food cost shows up while you can still do something about it: talk to a supplier, adjust a portion, rethink a shift.