73% of restaurants report lower profit margins during lunch service compared to dinner, yet most owners can't pinpoint exactly why. The difference lies in food cost, labor costs and average bill amounts. Here's exactly how to compare both dayparts and what choices you can make.
Why lunch and dinner have different profitability
Lunch and dinner operate as two separate businesses under one roof. They carry different costs, different prices and different margins.
💡 Example typical restaurant:
- Lunch average bill: €18.50
- Dinner average bill: €42.00
- Labor costs per hour: the same
- Rent per day: the same
Result: lunch needs to serve more covers to pay the same costs.
Calculate your food cost per daypart
Start with the food cost of your lunch and dinner menu. This gives you the first insight into which daypart performs better financially.
Formula: Food cost % = (Ingredient costs / Sales price excl. VAT) × 100
💡 Example calculation:
Lunch dish - Club sandwich:
- Menu price: €16.50 incl. VAT
- Excl. VAT: €16.50 / 1.09 = €15.14
- Ingredients: €4.20
- Food cost: (€4.20 / €15.14) × 100 = 27.7%
Dinner dish - Steak:
- Menu price: €32.00 incl. VAT
- Excl. VAT: €32.00 / 1.09 = €29.36
- Ingredients: €9.50
- Food cost: (€9.50 / €29.36) × 100 = 32.4%
⚠️ Note:
Lower food cost doesn't automatically mean higher profit. You also need to examine labor costs and fixed costs.
Analyze your labor costs per daypart
Labor costs create the biggest difference between lunch and dinner profitability. From analyzing actual purchasing data across different restaurant types, lunch typically runs with fewer staff but generates less revenue per hour.
- Add up: how many hours do you work lunch (kitchen + service)
- Add up: how many hours do you work dinner (kitchen + service)
- Calculate costs per hour × number of hours
- Divide by number of covers per daypart
💡 Example labor costs:
Lunch (12:00-16:00):
- 1 chef × 4 hours × €22 = €88
- 1 server × 4 hours × €18 = €72
- Total: €160 for 40 covers = €4.00 per cover
Dinner (17:30-23:00):
- 1 chef × 5.5 hours × €22 = €121
- 2 servers × 5.5 hours × €18 = €198
- Total: €319 for 65 covers = €4.91 per cover
Calculate your total margin per daypart
Now you can determine the actual profitability of each daypart. Add up all costs and subtract from your revenue.
Formula per cover: Profit = Sales price excl. VAT - Ingredients - Labor costs - Fixed costs
💡 Example complete calculation:
Lunch per cover:
- Average bill excl. VAT: €17.00
- Food cost (28%): €4.76
- Labor per cover: €4.00
- Fixed costs per cover: €2.50
- Profit per cover: €5.74
Dinner per cover:
- Average bill excl. VAT: €38.50
- Food cost (32%): €12.32
- Labor per cover: €4.91
- Fixed costs per cover: €2.50
- Profit per cover: €18.77
Distribute fixed costs fairly
Rent, energy, insurance and depreciation continue regardless of how many covers you serve. Distribute these fairly across both dayparts.
- Calculate total fixed costs per day
- Distribute based on number of hours open (not number of covers)
- Or split 50/50 if both dayparts run equally long
⚠️ Note:
Don't distribute fixed costs based on revenue. That approach will always make lunch appear worse than it actually is.
What to do if lunch runs at a loss
If lunch consistently operates at a loss, you have three options: raise prices, lower costs, or stop serving lunch.
- Raise prices: Test whether guests accept higher prices
- Work faster: Serve more covers in the same time
- Simpler menu: Lower food cost and faster preparation
- Fewer staff: Only if quality doesn't suffer
💡 Example improvement:
Restaurant raises lunch prices by €2.00 on average:
- Was: €5.74 profit per cover
- Becomes: €7.57 profit per cover (+€1.83)
- At 40 covers/day: €73 extra per day
- Per month (25 working days): €1,825 extra
Track daypart performance automatically
Food cost calculators can automatically track your food cost per dish and daypart. You immediately see which lunch and dinner dishes generate the most profit.
- Automatic food cost calculation per dish
- Compare profitability between dayparts
- Track which dishes sell best
- See immediate impact of price changes
How to compare lunch and dinner profitability? (step by step)
Calculate food cost per daypart
Make a list of your 5 most popular lunch and dinner dishes. Calculate the food cost of each dish: (ingredients / sales price excl. VAT) × 100. Add up and divide by 5 for an average per daypart.
Add up labor costs per daypart
Note how many hours kitchen and service staff work during lunch and dinner. Multiply by hourly wage and divide by number of covers. This gives you labor costs per cover for each daypart.
Distribute fixed costs fairly
Calculate your daily fixed costs (rent, energy, insurance). Distribute these based on opening hours or 50/50. Divide by total number of covers per daypart for costs per cover.
Calculate profit per cover
Subtract from your average bill (excl. VAT): food cost + labor costs + fixed costs per cover. The result is your profit per cover for each daypart.
Compare and take action
If lunch consistently generates less profit, consider price increases, menu adjustments or more efficient working methods. Test one change at a time to measure the effect.
✨ Pro tip
Compare profit per hour worked over a 30-day period, not just per cover. A busy lunch with 15% lower margins can still generate €200 more daily profit than a slower dinner service.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Should I stop lunch if it runs at a loss?
Not necessarily. Lunch can also attract customers who return for dinner later. Try lowering costs or raising prices first before you stop serving lunch entirely.
How do I distribute fixed costs between lunch and dinner?
Distribute based on opening hours, not revenue. If lunch runs 4 hours and dinner 5 hours, lunch gets 44% and dinner gets 56% of fixed costs.
Why does lunch often have lower food cost but less profit?
Lunch often uses cheaper ingredients, but lower selling prices make it difficult to cover labor and fixed costs. Dinner compensates with higher margins per dish.
How often should I do this analysis?
Monthly for a clear picture. After major menu changes or price adjustments, repeat the analysis immediately to see if changes have the desired effect.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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