GGB Food cost variance
The gap between theoretical and actual food cost. Where waste, portioning drift and shrinkage hide.
Food cost variance is actual food cost minus theoretical food cost, in percentage points or dirhams. Theory says what the sales mix should have cost; actual says what left the store room. The gap is the measurable home of over-portioning, prep waste, unrecorded comps and shrinkage, which is why it is the first number a turnaround looks at.
Variance = actual food cost % - theoretical food cost %
Multiply the point gap by food revenue to state the variance in currency for the period.
Illustrative: theoretical food cost is 29% and actual comes in at 32%, a 3-point variance. On AED 150,000 of monthly food revenue that is AED 4,500 leaving the building every month with no invoice to show for it.
Trace the leak