Food cost of sales issue

Joined Jul 19, 2017
I am based in the uk and looking for some advice on our recent end of month fcos. So the scenario of what happened was like this.

Over a week a ago the g.p was sitting about 32% or target is 27% so we start by ordering less food and utilising what we have without trying to run our stock levels too low as it was coming up for the end of month stock take.

On Monday ( end of month was tuuesday) the g.p was exactly 27% with revenue still to come in for the Monday, on Tuesday upon putting the figures in the g.p dropped to about 25.5% so looking good there. Then stock take was done. Our closing stock dropped almost £1000 which forced the g.p up to 28.1% ( opening stock was about £5600 and closing was £4700)

I was under the impression even though we dropped the stock level, what we sold should have been turneed into profit and covered the drop in stock levels? My head Chef always says try and keep the stock levels the same unless you get a great fcos for the month i.e 22%.

What would you do in this situation?

Would you buy more food to raise your stock level so it's carried over the month?

I just don't understand how buying more food would have helped this situation, if I bought while at 27% it would have pushed it way over to maybe 30+%

it was essentially have to be £1000 I would needed to purchase to balance it out???

I hope this makes sense and appreciate some advice to what you would have done.

We have external stock takers every month to make sure the count is right, the menu is branded so the coatings are done from the company.

many thanks again and I hope I have supplied enough information to give. Clear picture.
Joined Mar 3, 2016
It's slightly unclear what you are saying, but I will give it a go.

No, you should not buy at the end of the month thinking that it will make your stocktake look better. If you are invoiced in the current month for items that have been counted in the previous month, you have just added that total invoice to your current month. This could account for why you are down currently. Has this practice been done before? Perhaps you have an invoice in your current month where the stock has been counted last month.
Joined Jul 19, 2017
No all invoices are accounted for and put in daily when the goods received from our suppliers
Joined Mar 3, 2016
Some other things to consider:

Are you correctly accounting for wastage? If a meal comes back and you have to refire, is the first meal sent to the wastage account? What about a waitstaff who drops a meal etc.

Are management meals and staff tastings accounted for?

Is your portion control accurate?

Are your orders arriving correct? Does someone check the inventory against the invoice. You might be getting short changed by a vendor.

And, lastly, you might need to consider theft.
Joined Jun 25, 2017
There is nothing you could have done differently to change the FCOS. When your inventory was taken on the last day and it was 1,000 less, that is the same as if you purchased 1000 of food on the last day of the month. When your Chef stated that his cost dropped to 25% he was forecasting that the inventory would be the same level, when it was not. The reality is your food cost was high last month. The suggestions given in the previous post are all great advice and should be done consistently all the time. Since you are operating in a "branded" facility I suspect if food cost gets too high the "folks from corporate" come down and straighten it out.

Good Luck
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