How UK Restaurants Can Master Food Costing to Slash Expenses

Key takeaways

1. UK restaurants face sustained food inflation, rising labour costs, and higher energy bills, so precise food costing now plays a central role in protecting margins.
2. Accurate ingredient data, standardised recipes, and live plate costs give operators reliable visibility on dish profitability across sites and menus.
3. Real-time price monitoring, supplier alerts, and POS integration help teams react quickly to inflation, renegotiate prices, and optimise menu design.
4. Automated food costing reduces admin time, lowers the risk of human error, and supports better decisions on pricing, waste, and expansion.
5. Jelly automates invoice scanning, recipe costing, and price alerts so UK restaurants can cut food costs and boost GP with minimal extra workload. Talk to Jelly to see how it works in practice.

Why strategic food costing matters for UK restaurants

UK restaurants now operate in a cost-heavy environment. Food inflation sits around 6–9% by category and has driven menu price increases of 8–11% in 2024, while some products have risen by up to 31%. At the same time, average gross margins have fallen from 67% in 2019 to 61% in 2024, labour absorbs up to 38% of operating costs, and energy prices remain well above pre-pandemic levels.

Restaurants that lack accurate food costing often struggle to keep prime costs within the recommended 60–65% of sales. Poor ingredient data and slow reporting create blind spots around GP, menu performance, and supplier pricing, which makes it harder to respond before margins slip.

Teams that want tighter control of these pressures can adopt automated food costing to get live, accurate cost data without adding manual admin. Schedule a chat to see how Jelly supports that shift.

Step 1: Build accurate ingredient data for clear cost visibility

Reliable food costing begins with precise ingredient data. Restaurants need every invoice line, unit, and price captured correctly so that dish and menu costs reflect real spending.

A. Centralise and digitise invoice management

Centralised invoice capture reduces errors and admin time. Manual entry often introduces mistakes that distort costings and frustrate suppliers. Digital invoice scanning captures each line item and pulls it into one system for analysis.

Jelly’s Automated Invoice Scanning reads every line for quantity, SKU, and price, then syncs with tools like Xero. This turns routine invoice processing into a live data feed for costing and margin monitoring.

B. Standardise units for consistent pricing

Consistent units prevent mismatches between supplier pricing and recipe quantities. Suppliers may bill in cases, kilograms, or litres, while recipes use grams or millilitres. Without conversion to a common base unit, dish costs drift off target.

Restaurants can standardise by converting all prices to the smallest practical unit, such as grams or millilitres. This approach keeps maths simple and helps chefs compare suppliers fairly.

C. Monitor ingredient prices continuously

Live monitoring of invoice prices limits surprises from inflation and supply chain shocks. Volatile import costs and supply issues cause frequent price changes, so past price lists quickly become outdated.

Automated systems track price changes as invoices arrive and highlight increases. This gives operators a chance to query suppliers, switch products, or review pricing before profitability drops.

Step 2: Turn recipes into a digital cookbook with live dish costs

Clear recipes linked to real-time ingredient costs give chefs and owners an accurate picture of plate profitability. A digital cookbook also reduces the time needed to update costs when prices move.

A. Standardise recipes for accuracy and consistency

Standard recipes that list every ingredient, including oils, garnishes, and seasonings, give kitchens consistent outputs and reliable cost data. Vague directions, such as vague seasoning notes, create inconsistent GP and make multi-site control harder.

Operators can document exact quantities, yields, and prep notes for each dish. This ensures every team member uses the same method and portion size.

B. Use dynamic recipe costing instead of static spreadsheets

Dynamic costing updates dish costs automatically as new invoices arrive. Static spreadsheets quickly fall behind in a changing market and force teams to spend hours on manual recalculations.

Jelly’s Kitchen section lets chefs build recipes from ingredients already imported from invoices. Automated unit conversions and live pricing cut dish costing time from around 28 minutes per dish to a few minutes.

C. Include waste, yield, and spoilage in true costs

Realistic dish costs must include trim, shrinkage, and spoilage. A protein that loses weight during prep and cooking, or vegetables that require heavy trimming, cost more per portion than the raw invoice price suggests.

Teams can apply yield and waste percentages to ingredients like meat, fish, and fresh produce, then factor typical spoilage into overall food costs. This approach gives a more honest view of GP by dish and by category.

Step 3: Track live profitability to support better decisions

Linking food cost data to live sales helps restaurants react early to issues, protect margins, and promote the right dishes. Real-time visibility turns food costing from a static exercise into an everyday management tool.

A. Track real-time plate costs and GP

Accurate plate costing is essential because food costs often sit close to 29% of revenue. Live cost data shows when a dish that used to perform well has slipped below target margin.

Systems that recalculate GP each time an invoice updates ensure forecasts reflect current conditions, not last quarter’s prices. This helps owners take action before a poor performer pulls overall GP down.

B. Connect POS data for menu performance insights

Integration with POS platforms such as Square or ePOSnow shows which dishes drive both volume and profit. This view highlights menu stars, lower-margin favourites, and items that underperform on both sales and GP.

Sales mix analysis supports menu engineering decisions, such as which dishes to promote, reprice, reformulate, or remove. Decisions then rest on data rather than instinct.

C. Use proactive price alerts to control supplier costs

Price alerts highlight sudden ingredient increases before month-end. Early warnings give teams time to negotiate, claim credit notes, or adjust menus quickly.

Jelly’s Price Alert feature flags each ingredient price movement and stores a history of supplier behaviour. This evidence supports more confident negotiations and helps teams choose suppliers based on both price and stability.

Step 4: Engineer menus for higher profit and better control

Menu engineering uses data on cost and popularity to align menus with financial goals. This approach ensures that customer favourites and profitable items both receive attention.

A. Analyse sales mix to classify dishes

Sales and margin data support a simple four-way classification of dishes into stars, plowhorses, puzzles, and dogs. Stars combine high popularity and strong margins, while dogs deliver neither.

Operators can then decide to promote stars, reprice or reformulate plowhorses, reposition puzzles, and remove or replace dogs. This structured approach reduces guesswork and keeps the menu working hard for the business.

B. Adjust pricing with confidence

Live dish cost data supports small, frequent price changes instead of rare, reactive jumps. This is particularly useful while customers remain highly sensitive to price.

Well-informed adjustments based on current GP figures allow restaurants to protect profitability while staying competitive on key menu items.

C. Strengthen supplier negotiations with facts

Historical price records give buyers a clear view of trends, spikes, and discounts. This information turns negotiations into objective discussions based on data, not memory.

Jelly’s price history and alerts help teams challenge unjustified increases, request credits where needed, and secure better volume terms where spend justifies it.

The Jelly advantage: automate food costing and reclaim time

Manual spreadsheets struggle to keep pace with frequent price changes, multiple suppliers, and multi-site operations. Jelly automates the core tasks of food costing so operators gain accurate, timely information with less effort.

Jelly users often gain around 2 percentage points of gross margin within three months while cutting food costs by about 3%. Early adopters such as Amber saved £3,000–£4,000 per month and reduced admin by 10–20 hours per month.

Frequently asked questions

How quickly can UK restaurants see results from Jelly?

Most operators see clear results within about three months. Automated invoice capture and live recipe costing provide fast visibility on plate GP, which supports quicker price changes, recipe tweaks, and supplier discussions. Many users report around a 2 percentage point GP uplift and roughly 3% food cost reduction in that period.

Can non-technical chefs use Jelly comfortably?

Chefs can use Jelly with minimal training because the interface mirrors how kitchens already think about recipes and ingredients. Recipes are built by selecting items already pulled from invoices, so there is little manual data entry and no need to manage complex spreadsheets.

Can data from Jelly support better supplier negotiations?

Jelly’s price alerts and history give teams a clear log of how each ingredient price has moved over time. This record makes it easier to challenge unexpected increases, request credit notes where billing drifts away from agreed rates, and secure sharper pricing on high-volume lines.

Conclusion: use smart food costing to protect your restaurant’s future

UK restaurants now operate under sustained cost pressure, so manual food costing and delayed reporting no longer give enough control. Automated, accurate food costing helps teams understand true plate costs, respond quickly to inflation, and build menus that support both customer satisfaction and healthy margins.

Jelly provides a practical path to that level of control through automated invoice scanning, real-time recipe costing, and proactive price alerts. Book a chat with Jelly to see how automated food costing could support your sites over the next quarter and beyond.

Next steps for UK restaurants

Restaurants that embed accurate food costing usually see knock-on benefits in lower waste, tighter inventory control, and better planning for new sites or concepts. Teams can extend these practices to delivery and collection menus, where commission and packaging costs also need to sit within clear margin targets.