Restaurant KPIs: calculate consistently and track change

A KPI is useful when you understand its calculation and the decision it should support. A percentage means less if revenue includes VAT while costs exclude it, or if lunch guests are compared with the whole day’s labour hours.

The financial examples below use sales excluding VAT. Check that your reports use the same basis.

Food cost: measure consumption

For a period, start with opening stock value + purchases − closing stock value, adjusting for transfers between locations and other relevant movements. This separates purchases from ingredients actually consumed.

Food cost percentage = food ingredient consumption / food sales × 100.

In a hypothetical example, SEK 150,000 of consumption against SEK 500,000 of food sales gives 30%. Compare it with recipe costing to investigate supplier prices, portion variation and waste. A week with large purchases cannot be assessed properly without considering the stock movement.

Labour cost: include more than basic wages

Labour cost percentage = total labour cost for the period / sales for the period × 100.

Include relevant wages, employer contributions, holiday costs, pensions, insurance and agreed supplements. Keep the scope consistent. A rota is a plan; actual hours and final payroll records may produce a different result.

Sales per worked hour offers another perspective. Consider service, waiting times and workload before concluding that staffing should change.

Prime cost: food, beverages and labour together

Prime cost = (food and beverage consumption cost + labour cost) / total sales × 100.

If beverage revenue is included, beverage cost must also be included. The measure shows what remains for premises, utilities, administration, financing and profit. No single percentage proves that a business is healthy: the target must fit its cost structure.

Average spend and product mix

Sales per guest = sales / guest count. Sales per transaction instead uses transaction count as the denominator. Do not interchange them when guests split bills or place several orders.

Also follow each category’s share of sales. If the beverage share changes, inspect the actual products and costs involved. A category name does not establish profitability.

RevPASH and occupancy answer different questions

RevPASH means revenue per available seat-hour and is used in restaurant revenue management, including at Cornell.

Assume 60 available seats for six hours and SEK 45,000 in sales. RevPASH is 45,000 / (60 × 6) = SEK 125. Use actual available capacity if part of the room is closed.

Occupancy over time can be calculated as occupied seat-hours / available seat-hours × 100. With 216 occupied out of 360 available seat-hours, it is 60%. Dividing the evening’s guests by the number of chairs overlooks the fact that several guests can use a chair in succession.

Waste: choose a defined method

Measure kitchen, serving and plate waste separately, for example, and follow grams per guest or portion. The Swedish Food Agency’s handbook supports systematic measurement. If valuing waste in money, document the cost basis. Weight, purchase value and potential sales value are different measures.

Give each exception a next action

Review immediate operational measures after service, discuss trends weekly and reconcile cost measures when stock counts and accounting records are ready. Investigate an unusual number before changing prices, recipes or schedules.

Vendion Analytics and Staff can provide sales and staffing information. Add current recipe costs, stock counts and accounting records where the calculation requires them. A KPI benefits from clear inputs, rather than updates more frequent than the underlying records.