Gross Margin per Item and Category

Gross margin is the flip side of Food Cost % — what is left after you pay for the goods. If Food Cost is 30 %, gross margin is 70 %. This is the margin you have to work with to cover wages, rent, utilities, marketing, and profit.

Formula

Gross Margin % = (Net Sales − Cost of Goods) / Net Sales × 100

Or expressed in absolute numbers:

Gross Margin (SEK) = Net Sales − Cost of Goods

Example: You sold 500,000 SEK and had 150,000 SEK cost of goods. Gross margin = 350,000 SEK = 70 %.

Swedish restaurant benchmarks

Color coding in Vendion

Gross margin per category

Vendion shows gross margin both per item and per category in Finance → Profitability by Category. The table contains:

Interpretation: In the example, non-alcoholic drinks (82 %) pull gross margin up, while wine (63.8 %) pulls it down. Selling more soft drinks and less wine increases total gross margin. But this may be hard to steer — wine is often what guests want with their food.

Per-item scatter plot

Below the table a scatter plot shows:

• X-axis: Units sold
• Y-axis: Margin % (color-coded green/amber/red)
• Bubble size: Total revenue

Look for amber and red dots with large bubble size — those are items with both high volume and poor margin. Each such dot is an opportunity for a price increase or portion reduction.

Gross margin in SEK vs percent

It is a common trap to look only at margin % and miss volume. You make more money on a cookie with 80 % margin sold 30 times/day (15 SEK × 30 = 450 SEK/day) than a premium wine bottle with 50 % margin sold 2 times/day (240 SEK × 2 = 480 SEK/day — OK, similar). The point: review margin SEK/unit × units sold.

Vendion shows both in Menu Engineering:

• The "%" toggle shows margin as percent
• The "SEK/unit" toggle shows margin in absolute SEK

Pricing test: Raise the margin

If a category has low gross margin (<60 %), consider:

1. Price increase 5-10 %: If you are below benchmark you can often raise without losing volume
2. Change supplier: Get quotes from at least 3 suppliers
3. Adjust recipe: Swap an expensive ingredient for a cheaper one with equivalent experience
4. Reduce portion: 180 g meat instead of 200 g — saves 10 SEK/portion
5. Repackage: Build a combo meal that bakes in the margin

Gross margin vs net margin

Gross margin = after cost of goods (what we discuss here) Net margin = after ALL costs including labor, rent, utilities, marketing, depreciation

Target for net margin in restaurants: 5-15 %. If gross margin is 68 % and net margin is 8 %, 60 percentage points go to other costs. Profitability is built by lowering cost of goods (raising gross margin) and controlling labor cost.

Period comparison on gross margin

Activate Comparison in the analytics filter bar (last month vs the month before) to see how margin evolves over time. Red arrow on margin % = worsening, green arrow = improving. If margin SEK rises but % falls, it may be because you sold more low-margin items — for example a new campaign on a Plowhorse.

Error warning: Don't miss items without cost prices

If an item lacks a cost price, Vendion counts its margin as 100 %. That makes your total gross margin look falsely good. Go to Finance → Warning table and fill in cost prices on all listed items before making decisions based on margin.

Use the export for deeper analysis

Export the Finance table as CSV and open in Excel. Create a pivot table with:

• Row: Category
• Column: Month
• Value: Margin %

You get a time series per category that directly shows which categories are losing margin. Especially useful before price revisions twice a year.

AI Boss: Ask about margin

• "Which category has the highest margin?"
• "Which 5 items have the worst margin?"
• "Which category improved the most this month?"
• "Which Plowhorses have the lowest margin and highest volume?"