Reporting Why COGS Benchmarks Break Down Across Restaurant Concepts and How To Read Them

Running multiple restaurant locations often means managing very different concepts at once, each with its own menu mix, suppliers, labor models, and cost structure. A 2% COGS swing doesn’t always mean something is broken. What matters is whether you can explain it. When unexplained variance repeats across a district, it compounds into real profit loss. 

The challenge isn’t just tracking your numbers. It’s knowing whether those numbers make sense for each concept you oversee. 

This guide breaks down COGS benchmarks by restaurant type, shows you how to calculate and compare COGS across concepts and locations, and outlines the strategies multi-unit operators use to protect margins without forcing every store into the same box. 

What is the Cost of Goods Sold in Restaurants? 

For multi-unit restaurants, COGS benchmarks typically range from 25% to 35% of total sales. Quick-service concepts usually land closer to 25-30%, while casual and fine dining operations run 30-35%. The number that really matters is prime cost, your combined COGS and variable labor cost, which healthy restaurant groups keep under 55–60% to protect margins and fund growth. 

Cost of Goods Sold captures the direct costs of every ingredient and material used to produce your menu items. Think food, beverages, packaging, and anything else that ends up on a guest plate or in their hands. Labor, rent, utilities, and marketing fall into separate expense categories and don't belong in your COGS calculation. 

Why does this distinction matter? When your COGS creeps up, the problem lies somewhere in your supply chain, portioning, or waste. It's not a staffing issue or a lease problem. Knowing what COGS actually measures helps you look in the right places when margins tighten. 

How to Calculate Restaurant COGS  

Calculating restaurant COGS is straightforward, but accuracy depends on consistent inventory tracking across every location. 

COGS Formula: 
(Beginning Inventory + Purchases − Ending Inventory) ÷ Total Sales 

This produces your COGS percentage, which you can compare against industry benchmarks and performance across locations and concepts. 

COGS Benchmarks by Restaurant Type 

COGS benchmarks vary significantly based on your concept. A fine-dining restaurant specializing in dry-aged steaks operates under a completely different cost structure than a pizza shop using flour, sauce, and cheese. Here's what typical ranges look like across segments. 

Why COGS Benchmarks Matter for Multi-Unit Operators 

A single COGS number in isolation tells you very little. Is 32% good or bad? It depends entirely on your concept and what comparable operations are running. Benchmarks provide the context you need to evaluate whether each location is operating efficiently or quietly bleeding margin. 

When you compare your locations against industry standards and against each other, patterns start to emerge. A store running 34% COGS, while your concept typically hits 29%, signals a problem worth investigating. Maybe it's waste, theft, or a supplier issue. Either way, you wouldn't know to look without the benchmark. 

Benchmarks also help you set realistic targets grounded in reality rather than arbitrary expectations. And when you're negotiating with vendors or reconsidering menu pricing, COGS data gives you the foundation for those conversations. 

How to Compare COGS Across Locations 

• Benchmark like-for-like locations by concept, region, or volume tier to establish internal standards.
• Normalize for menu mix and volume by separating food and beverage COGS where applicable.
• Set location-specific targets based on concept, regional costs, and operational maturity.

Related Metrics to Track Alongside COGS 

• Prime cost: Combines COGS and labor, your two most significant controllable expenses. Healthy groups typically target around 55%, with margins tightening quickly above 60%.
• Inventory turnover: Shows how efficiently products are moving. Low turnover can signal over-ordering or waste, while very high turnover may indicate stockouts. Most concepts target 4-8 times per month.
• Menu item profitability: Highlights which dishes truly drive margin. High-volume items with thin margins can quietly hurt overall profitability—especially if guests choose them over higher-margin alternatives. 

Strategies to Reduce COGS Across Multiple Locations 

If you can’t measure it, you can’t improve it.  

For multi-unit restaurant groups, COGS issues rarely show up all at once. They creep in through small variances that go unnoticed when performance is reviewed only at month-end. Getting accurate COGS data in front of operators daily, with the ability to flag abnormal shifts as they happen, is what turns cost control from a reactive exercise into a manageable process.

When COGS drifts above the benchmark, the root cause usually lives in a small set of operational levers rather than a single bad decision.

• Recipe and portion consistency to reduce location-to-location variance
• Inventory discipline and waste visibility to catch spoilage, over-ordering, and shrinkage before they compound
• Purchasing standardization to limit off-contract buying and pricing gaps
• Menu mix optimization to emphasize items that consistently deliver margin

Monitoring COGS At Scale Across Concepts 

Monthly or quarterly COGS reviews surface problems too late. By the time variances appear on a P&L, margin erosion has already compounded. 

Many operators rely on spreadsheets early on because they are simple and flexible. As groups grow to five to ten locations, however, store-level complexity often outpaces what spreadsheets can reliably support. At that stage, purpose-built COGS tracking tools like COGS-Well help manage inventory, purchasing, and food cost calculations more accurately at the location level. What becomes harder is maintaining centralized visibility across concepts, regions, and time periods. 

That is where operational intelligence platforms come into play. By aggregating performance signals across locations, above-store leaders can quickly see where costs are drifting, compare like-for-like performance, and intervene sooner. The result is less reliance on manual reporting, faster accountability, and COGS management that scales with the business. 

Request a demo to see how centralized operational intelligence supports smarter cost control across multi-unit restaurant groups.