Restaurant Inventory Management: How to Stop Losing Money to Waste and Theft

In a restaurant with $50,000/month in food sales, a 5% inventory shrinkage problem costs $2,500/month — $30,000/year. Most operators do not catch it until they are wondering why the numbers never add up.

Here is how to do inventory right.

How often to take inventory

Weekly: Full inventory count for all categories. This gives you weekly cost of goods sold (CoGS) data.

Daily: Spot counts for your highest-value items — proteins, seafood, premium spirits. These are most vulnerable to theft and drift.

The inventory count process

1. Count with two people when possible — one calls, one records
2. Count from back to front, top to bottom in each area
3. Use consistent units (cases, pounds, bottles, not mix of units)
4. Do counts at the same time every week, typically before first delivery of the week

Calculating weekly CoGS

Formula: (Opening Inventory + Purchases) - Closing Inventory = CoGS

If your opening inventory was $8,000, you received $6,000 in deliveries, and closing inventory is $9,200, your CoGS for the week is $4,800.

Divide CoGS by food sales to get your weekly food cost %: $4,800 / $17,000 = 28.2%

Red flags to watch for

• CoGS climbing week-over-week without a sales increase
• Specific items disappearing faster than menu sales justify
• High-value items (proteins, spirits) with unexplained variance
• Delivery counts that do not match invoices

Par levels: your reorder safety net

Set a par level for every item — the minimum quantity you need on hand before ordering. When the count falls below par, it goes on the order sheet automatically. This prevents both stockouts and over-ordering.

Review pars quarterly and adjust for seasonality — your par on burger patties should be 30% higher in summer than winter if you are near a beach.