KPI of Restaurant Business

1. KPIs of
Restaurant
Business
w w w . l e g i t a x . i n

2. Why is measuring
restaurant KPIs
important?

3. To Improve their service
To Continue having satisfied diners
To Focus on ways they can best use their
budget, staff and time

4. 10 Restaurant KPIs

5. 1. Cost of goods sold
It allows restaurants to see how much money they spend buying
supplies, such as menu ingredients. This helps determine how well
your restaurant manages its supplies and can help you plan future
purchases. You can find this metric by adding your opening stock
to the purchases made during the designated period, then subtract
the closing stock.
(Opening inventory + Purchases) - Closing Stock = Cost of goods sold

6. 2. Gross profit
Gross profit is the total revenue a restaurant makes after
subtracting its cost of goods sold. Restaurants use this metric to
determine how profitable their business is and to see if they have a
net profit. To find your gross profit, find your total revenue and
subtract your cost of goods sold
Total Revenue - Cost of goods sold = Gross profit

7. 3. Labour cost ratio
The labour cost ratio is the relationship between labour costs and
gross sales. Labor costs may include hourly wages, payroll taxes,
health care and other related expenses. To calculate this metric,
divide your labour costs by your sales
Labour costs / Sales = Labour cost ratio

8. 4. Employee Turnover Rate
Employee turnover rate is the number of employees who leave a
company during a designated time period. This metric can be
helpful in determining how satisfied your employees are working at
your restaurant. It also can be helpful for seeing how effective you
are in retaining talent and providing advancement opportunities
Number of employees who quit / Number of employees working = Turnover Rate

9. 5. Average table occupancy
Average table occupancy examines the average amount of diners
that visit a restaurant during a period. Restaurants can use this rate
to help them determine whether they are effectively using their
seating capacity. To find this amount, you divide the number of
occupied tables by the total number of tables.
Number of occupied tables / Total number of tables = Average table occupancy

10. 6. Spend Per Head
Spend per head is a metric a restaurant can use to see how much
money customers spend on average when eating a meal there. This
helps restaurants see what times of day diners spend most. They
can then use this data to set up promotions to encourage customers
to dine during the less popular times.
Total revenue / Number of customers = Spend per head

11. 7. Prime Cost Ratio
The prime cost ratio is a restaurant's total costs of production and
can help a company determine the minimum sales price for their
food and drinks. Typically, businesses aim to have a prime cost
ratio of between 45% and 60%.
(Cost of goods sold + Labor costs) / Total sales amount = Prime cost ratio

12. 8. Guests per server per hour
The metric of guests per server per hour looks at how many
customers a server assists in a typical hour, which can show the
efficiency of your servers. The formula for finding your guests per
server per hour is the total number of guests served divided by the
total number of hours a server works
Total number of guests / Number of hours worked = Guests per server per hour

13. 9. Per-Person Average
Per-person average is the amount of money a server generates for
each customer they serve. Knowing this metric is important for
seeing which servers generate the most money. You can find your
per-person average by dividing a server's total sales by the number
of guests they served.
Server's Total Number of Sales / Number of Guests served = Per-Person Average

14. 10. Food wasted
Food wasted is a percentage of how much food goes uneaten in
relation to the amount of food purchased and can help
companies looking to reduce waste in their operations. Typically,
this involves weighing the food wasted and dividing the amount
of food purchased that became unused by the amount of total
food purchased.
Weight of wasted food / Total food purchased = Percent of food wasted

15. For any queries, please connect us
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info@legitax.in
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