Your restaurant is profitable. Your team is solid. Guests are happy. And you're still losing €50,000 a year without noticing.

Not from catastrophic theft or dramatic waste, but from variance. That’s the gap between what your inventory system says you used and what actually disappeared. Most operators know the term. Fewer track it. Almost none connect it to actual money walking out the door every month.

If you're running 5% variance instead of the 3% benchmark, that "small" difference isn't small. It's thousands in lost gross profit. Money that could have paid for equipment, covered slower months, or ended up in your pocket.

Here's what that costs and where it's coming from.

The Real Cost of "Just a Few Percent"

Food cost variance adds up faster than most operators realize. Here's what 2% excess variance actually means:

Small independent restaurant (€30,000 monthly COGS):  
2% excess variance = €600/month = €7,200/year in lost gross profit

Mid-size hotel F&B operation (€80,000 monthly COGS):  
2% excess variance = €1,600/month = €19,200/year in lost gross profit

Multi-location groups (€200,000 monthly COGS):  
2% excess variance = €4,000/month = €48,000/year in lost gross profit

That's not revenue. That's profit. Compounded over three years, a mid-size operation loses nearly €60,000 that could have been reinvested, saved, or distributed.

And 5% doesn't feel catastrophic. It's slightly above acceptable range. Easy to rationalize as "we're busy" or "things slip through." But that rationalization costs real money, month after month.

Where Variance Actually Comes From

Inventory variance tracking reveals several problems happening at once. Figuring out which drives your numbers is the difference between fixing it and accepting it as "the cost of doing business."

1. Waste (40-50% of typical variance)

This is the biggest culprit and the most fixable. Prep errors, spoilage, over-ordering, trimming inefficiencies. Waste compounds fast with perishables.

A single protein item going bad skews weekly variance by hundreds of euros. Multiply that across categories and you see why cost of wastage is both an environmental and financial issue.

What's worse: it often goes unrecorded. Someone trims salmon poorly, tosses the excess, moves on. No one logs it. Your system thinks you used that salmon in a dish. Variance creeps up.

2. Inconsistent Portions (25-35% of typical variance)

This happens so gradually staff don't realize they're doing it. A bartender free-pours "just a bit more" gin. A line cook plates "generous" portions because they want guests happy. Over weeks and months, those small decisions compound.

Dangerous because it's invisible in the moment. Guests aren't complaining - they're getting more than they paid for. But you're absorbing the cost difference, and it doesn't show up as a line item anywhere.

The only way to catch it: observe service during peak hours and compare what's being served against recipe specs.

3. Recipe Deviation (15-20% of typical variance)

Your chef creates a dish with specific ingredients at specific costs. Three months later, the kitchen is "improving" it with add-ons that weren't in the original spec. Or substituting ingredients without updating the cost structure.

Sometimes this happens because a supplier changed and the team adapted. Sometimes it's creative freedom running amok. Either way, your theoretical costs are based on the original recipe, but actual costs reflect the modified version.

This requires recipe discipline and regular cross-checking between what's documented and what's being prepared. Ingredient variance tracking catches these deviations before they become expensive patterns.

4. Unexplained Loss (10-15% of typical variance)

Hardest to pinpoint because it could be theft, tracking errors, supplier short-deliveries, or all three. Most operators assume theft when variance spikes, but often the issue is systemic: poor receiving protocols, missing inventory records, or not catching when a delivery is short.

The key is to tighten your processes. Theft is real, but jumping straight to staff accusations without first ruling out operational gaps damages morale and misses the actual problem.

What to Do When Variance Spikes

Knowing variance exists is one thing. Investigating and fixing it is another. Here's a prioritized approach that doesn't require shutting down operations or spending days buried in spreadsheets.

• First 48 Hours

Start with your highest-cost categories: proteins, alcohol, specialty ingredients. These drive the majority of COGS, so they're likely driving variance too.

Compare theoretical usage (what your system says you should have used based on sales) against actual usage (what's missing from inventory). Look for obvious anomalies: missing inventory records, supplier delivery errors, dramatic spikes in specific items.

The challenge: you probably don't have real-time visibility into these numbers. You're pulling POS reports, cross-referencing supplier invoices, manually calculating theoretical usage, then trying to spot discrepancies. By the time you've compiled everything, variance could have gotten worse.

This is where real-time cost tracking systems come in. Modern inventory management platforms like Stockifi automatically track theoretical vs actual usage, flag variance anomalies, and surface exactly which items are driving the discrepancy. You see today's numbers and can act immediately, instead of reacting to last month's problem.

Once you have that visibility, prioritize this way:

• First Two Weeks

Observe portioning during peak service, but don't announce it. You want to see what actually happens when pressure is on, not what happens when staff know they're being watched.

Review recipe cards against what's being prepared. Are portions consistent with specs? Are ingredients being substituted without documentation?

Talk to your team. Sometimes they'll surface issues you didn't know existed like problems with supplier quality, equipment malfunctions affecting yield, or process gaps creating waste.

• Ongoing

Review variance reports regularly and dig into what they're telling you. A single spike might not mean much, but consistent patterns point to issues needing attention. The key is committing to act on what you find rather than just acknowledging the problem and moving on.

Tighten receiving protocols. This catches supplier short-deliveries, which are more common than most operators realize. Someone needs to verify counts and weights at delivery, not just sign off on invoices.

Train staff on why consistency matters, not just how to execute it. When your team understands that portioning affects profitability—and therefore job security and raises—they're more likely to maintain standards.

Why This Won't Fix Itself

You know variance exists, but not how much it's costing you in actual money. And because it's not a line item on the P&L, it's easy to deprioritize when you're dealing with staffing issues, guest complaints, or a hundred other urgent problems.

But ignoring it compounds the issue. A small portioning problem becomes normalized. A waste problem spreads across multiple stations. What could have been corrected in a week now requires a full operational overhaul.

Fixing this doesn't require much, but it does require visibility and discipline. You need to know your numbers in real-time, and you need a process for acting on them when they spike.

The Path Back to 3%

Achieving 3% variance is not for perfection, but to catch problems early and address them before they become expensive patterns.

That difference between acceptable and problematic variance is roughly €60,000 over three years for a mid-size operation. Enough to fund an expansion or weather a slow season.

The question now is: What's your current variance percentage, and when's the last time you actually looked into it?

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Ready to track variance automatically? See how Stockifi helps restaurants monitor inventory variance in real-time and flag discrepancies before they compound.

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