How to Improve Your Cost of Goods Sold (COGS)

What steps can you take to improve your restaurant operation’s cost of goods sold (COGS)?


What is cost of goods sold? Food. Beverage. Paper.
COGS: Largest expense as an operator; challenging to control and maintain.
What hurts COGS? Missed forecasting, ordering/receiving errors, transfers/borrow and loan, inventory control, unintentional loss/waste, Poor training

Steps you can take

Sales Forecasting

  • Calendars: remember first quarter events like community events, federal holidays, winter/school breaks.
  • Ordering: over ordering? If you are over sales forecast, you have too much product.
  • Scheduling: Are your employees properly staffed for daypart – specific food prep tasks?
  • Training: Forecasting and scheduling training & developments for all employees


  • Deliveries: schedule truck order 2-3 times a week
  • Organizations: Storage areas, order guide, use inventory management to track product
  • Use built-to-order system
  • Implement a 10% sales buffer that can help accommodate for random spikes in sales


  • Make ordering a two-person process
  • Order enough product to get through to next delivery
  • Appoint someone to receive the order and put it away
  • Check-in items to make sure you are getting what you order
  • Rotate products! This will prevent loss, waste, and quality issues


  • Keep kitchen and storage areas clean and organized
  • File inventory sheet for review and teaching
  • Have opening manager verify previous day’s count/variances
  • Continuously check inventory through the week


  • Have specific book and recipe cards to be followed
  • Make sure utensils and cookware are clean
  • Hot foods: protect yields and cook to proper temperatures
  • Monitor all prep and carryover / non-peak times

Line Operations

  • Use proper portioning tools and use portion control
  • Train kitchen staff on all recipes, ingredients, and cleaning
  • Monitor waste in garbage cans and sinks

POS metrics/ loss of theft

  • Train cashiers and implement register accountability
  • Monitor all POS metrics
  • Perform surprise cash audits on cashiers