Variance
Also called: food cost variance
Variance is actual food cost minus theoretical food cost, in dollars and in percentage points. It measures everything that consumed inventory without producing a sale. One to two points is ordinary friction; three or more points is a system that needs fixing.
Formula
Variance = Actual COGS − Theoretical food cost
Expressed as points: (Variance ÷ Food sales) × 100.
Worked example · Converting points to a salary
- Annual food sales
- $1,850,000
- Variance
- 3.1 percentage points
- Annual leakage
- $57,350
Closing half the gap funds a full-time line cook. This is the arithmetic that makes a weekly count worth doing.
Where it hides, ranked by how often it's the answer
| Cause | Typical tell | First move |
|---|---|---|
| Over-portioning | Variance concentrated in one or two high-volume dishes | Weigh 20 random plates; scale on the line |
| Stale recipe costs | Variance appears everywhere at once, evenly | Recost the top 20 dishes against current invoices |
| Comps, voids, staff meals | Variance tracks headcount or a manager's shifts | Pull the comp report by employee |
| Spoilage | Variance concentrated in produce and dairy | Two-week waste log; check par levels |
| Receiving errors | Variance appears the week of a specific delivery | Reconcile invoices against what was actually put away |
| Theft | Persistent, dish-independent, survives every other fix | Investigate last — after the five above are ruled out |
Run the numbers
Ideal vs. actual variance calculator
The guide that works it through
Why Is My Food Cost So High? A Diagnostic
Seven causes of a high restaurant food cost, in the order they're usually the answer — with the check that confirms or eliminates each one in under an hour.
Related terms
Theoretical vs. actual food cost
Theoretical is what the recipes say you should have spent; actual is what inventory says you did. The gap is the whole story.
Shrinkage
Inventory that disappears without a corresponding sale — waste, spoilage, error and theft combined.
Spoilage
Product lost to age, temperature or damage before it could be sold.
Comps
Food or drink given away — recovery, staff meals, promotions — real cost with no matching revenue.
Portion control
Keeping served portions equal to specced portions — the difference between the food cost you calculated and the one you get.