FIFO Inventory Management
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Learn moreWhat is FIFO Inventory Management?
FIFO (First In, First Out) inventory management is a stock rotation method where restaurants use or sell their oldest stock first. It’s the standard approach for perishable ingredients, since it reduces spoilage, cuts waste, and stops food cost creeping up from stock that expires unused on the shelf.
FIFO isn’t complicated in principle – oldest stock first, always – but it’s easy to let slip once a kitchen gets busy, and the cost of letting it slip shows up quietly in your food cost rather than as an obvious problem. Here’s how it works in practice and why it’s worth enforcing properly.
How does FIFO work in a restaurant kitchen?
The mechanics are straightforward:
- Label stock on arrival with the date it was received, or use “use by” dates already on packaging
- Store new stock behind or under older stock, so the oldest items are always the ones closest to hand
- Train staff to check dates, not just reach for whatever’s nearest, when pulling ingredients for prep
It sounds obvious written down. In a busy kitchen during service, it’s the first discipline to slip — which is exactly why it needs to be a habit, not a one-off instruction.
Why does FIFO matter for restaurant food costs?
Spoiled or expired stock is a direct hit to food cost that never shows up as a sale. It’s also one of the main reasons actual usage runs ahead of theoretical usage – ingredients that go in the bin rather than on a plate still count as used, just with nothing to show for it.
FIFO matters most where stock moves fastest and menus are broadest. A casual dining kitchen running a wide menu has more perishable lines in rotation at once than a tightly curated one, which means more places for rotation to break down unnoticed. It matters just as much at the other end of the spectrum – fine dining kitchens work with higher-cost ingredients, so the same spoilage event costs considerably more.
Regular stock checks are what actually catch a FIFO breakdown before it becomes a written-off box of stock, since a rotation slip is invisible until someone physically finds the out-of-date item at the back of the shelf.
Related terms
FAQs
Frequently asked questions
First In, First Out. It means the oldest stock in your inventory is the first to be used or sold, rather than newer stock being reached for out of convenience.
LIFO (Last In, First Out) uses newest stock first, which makes little sense for perishable food. FIFO is the near-universal standard in hospitality precisely because ingredients age and expire.
Any restaurant handling perishable ingredients benefits, but the risk is highest where menus are broad and stock turnover is fast – more lines in rotation means more opportunities for older stock to get missed.
Date-labelling on delivery and a consistent “old stock to the front” shelving rule cover most of it. The bigger lever is training – FIFO fails through habit, not through a lack of process.
Tenzo connects to your inventory and POS data to flag when actual usage is running ahead of theoretical usage, which is often the first sign that stock rotation is breaking down somewhere in the kitchen.
