Restaurant inventory management: stock counts, rotation and ordering

How do you manage stock in a restaurant?

In a restaurant, stock moves every day: deliveries, prep, sales, breakages, staff meals. Without a method, you order “as usual”, find a tub of expired cream at the back of the cold room, and food cost drifts up without anyone knowing why.

This guide is part of our Run a restaurant series. It goes with the guide to food cost and menu pricing: the recipe card says what a dish should cost, the stock count says what it really cost. Legal points refer to France.

How do you do a restaurant stock count?

In France, every trader must check by inventory, at least once every twelve months, what the business owns and its value (article L123-12 of the French Commercial Code). That is the year-end stock count your accountant asks for. But to run a restaurant, once a year is not enough: count every month, on the same date, ideally on the last day of the month after the last service.

The method in 6 steps

1. Prepare a fixed list of all your items, in the order of your storage areas (dry store, cold room, freezer, cellar, bar). You count as you walk round, without going back.
2. Count in pairs if you can: one counts, the other writes. It is faster and there are fewer mistakes.
3. Use the purchase unit: kilo, litre, bottle, case. For an opened item, estimate what is left (half a bottle, 2 kg of a 5 kg bag).
4. Count prepared items too (stocks, sauces, the day’s desserts) at their cost price.
5. Value each line at the last purchase price excluding VAT.
6. Add it up: that is your closing stock for the month, and the opening stock for the next one.

How do you work out actual usage and actual food cost?

The formula is simple: actual usage = opening stock + purchases for the month − closing stock. Divided by sales excluding VAT for the month, it gives your actual food cost.

Then compare this with your theoretical food cost: the cost on your recipe cards multiplied by the sales of each dish. The gap between the two is waste, generous portions, staff meals, ordering or invoicing errors. If it grows month after month, find out where.

Days of stock

Another useful number: how many trading days your stock covers. In the example, usage is €12,100 over 30 days, about €403 a day. The closing stock (€3,900) covers roughly 9.7 days. If this number rises for no reason (no event to prepare, no big wine order), you probably have too much money sitting in your fridges and cellar.

Actual food cost is also half of your prime cost, explained in our guide to restaurant profitability.

FIFO, FEFO, use-by, best-before: how do you store and rotate stock?

There are two rotation rules:

• FIFO (first in, first out): the item delivered first is used first.
• FEFO (first expired, first out): the item with the nearest date is used first, even if it arrived later.

In a kitchen, FEFO is the safer rule: two deliveries of the same product do not always have dates in the same order. In practice, at each delivery, put new items behind the ones already there, and check the dates.

Use-by and best-before: the difference (France)

In France, inspections by the veterinary services (DDPP or DDETSPP) check, among other things, date labels, temperatures and the cleanliness of the premises. Hygiene and traceability rules are covered in our guide to food hygiene and HACCP.

• Every opened or prepared item has a label: name, date made or opened, the use-by date you set.
• New items go behind, those closest to their date in front.
• A walk round the fridges every morning: anything near its date goes into the special or is removed.
• Nothing is stored directly on the floor.

How do you calculate supplier orders?

Ordering by guesswork leads either to running out (a dish taken off mid-service) or to overstock (food thrown away). The minimum stock method avoids both.

1. For each item, estimate what you use between two deliveries from recent weeks’ sales and upcoming bookings.
2. Add a small safety margin for the unexpected.
3. Order = need until the next delivery + margin − current stock.

Example: you use about 3 kg of butter between deliveries, you keep 1 kg as a margin and you have 1.5 kg left. Order: 3 + 1 − 1.5 = 2.5 kg.

Here is a simple order sheet to copy into a spreadsheet:

Supplier: … Delivery day: …

Item | Unit | Need until next delivery | Margin | Current stock | To order

Unsalted butter | kg | 3 | 1 | 1.5 | 2.5

Double cream | litre | … | … | … | …

Checked by: … Date: …

• One person in charge of orders per supplier.
• Fixed ordering days, written in the rota.
• On delivery: check quantities, dates and temperatures before signing.
• Every invoice compared with the order.

How do you track losses and cut waste?

Losses rarely show in the till. To see them, you have to write them down. Put a simple sheet near the kitchen bin or in the cold room.

Date | Item | Quantity | Reason (out of date, cooking error, sent back, breakage, overproduction) | Initials

After a month, look at the three items that come up most. The fixes are often simple: order more often in smaller amounts, cut back a prep made too far ahead, use trimmings in a daily special, review a portion.

A shorter menu also limits waste: fewer items, faster rotation. See our guide to restaurant menu design, and our guide to reducing restaurant food waste for food waste sorting and donations.

Notebook, spreadsheet or software: which tool should you use?

The best tool is the one your team will actually use.

Start simple. A spreadsheet with a “stock count” tab, an “orders” tab and a “waste” tab already covers the essentials. Move to software when the spreadsheet costs you time, not before.

The restaurant owner’s guide

Open, run, grow: each stage has its full guide and detailed guides, with their reading time.

This guide for your trade

• Restaurants
• Bars
• Bakeries

Go further

• Run a restaurant: the complete guide
• Food cost and menu pricing
• Restaurant profitability: break-even and margins
• Reduce restaurant food waste
• Food hygiene and HACCP in a restaurant