Most restaurant owners obsess over cutting food costs, yet they completely ignore the goldmine sitting right in front of them: average order value. While slashing expenses might save you pennies, a modest 10% boost in what each guest spends can generate thousands in extra revenue annually. The math behind this transformation is simpler than you think.
What is average order value?
Average order value (also called 'AOV') represents your total revenue divided by the number of orders or covers. It reveals exactly how much each guest spends during their visit to your establishment.
💡 Example calculation:
Restaurant De Smaak in January:
- Total revenue: €45,000
- Number of covers: 1,800
Average order value: €45,000 ÷ 1,800 = €25.00
Calculating the financial impact of a 10% increase
A 10% increase means each guest spends 10% more during their visit. You calculate the financial impact using this formula:
New revenue = Number of covers × (Current average order value × 1.10)
💡 Example calculation:
Restaurant De Smaak with 10% increase:
- Current average order value: €25.00
- New average order value: €25.00 × 1.10 = €27.50
- Number of covers remains: 1,800
New monthly revenue: 1,800 × €27.50 = €49,500
Extra revenue per month: €49,500 - €45,000 = €4,500
Impact on an annual basis
The real magic happens over twelve months. That seemingly modest €2.50 per guest compounds into serious money.
💡 Annual calculation:
Restaurant De Smaak on an annual basis:
- Extra revenue per month: €4,500
- Number of months: 12
Extra annual revenue: €4,500 × 12 = €54,000
⚠️ Note:
This represents extra revenue, not automatic profit. You must factor in any additional costs involved.
Calculating the impact on your profit
Extra revenue looks great on paper, but what does this mean for your bottom line? That depends entirely on how you achieve the 10% increase. Here's something most kitchen managers discover too late: the method matters more than the percentage itself.
- Higher prices: Nearly all extra revenue becomes profit (minus VAT)
- Selling more drinks: High margin means substantial extra profit
- Promoting expensive dishes: Profit depends on food cost of those items
- Desserts and sides: Typically deliver high margins
💡 Example profit calculation:
Suppose: the extra €2.50 comes mainly from drinks (75% margin):
- Extra revenue per guest: €2.50
- Profit margin on drinks: 75%
- Extra profit per guest: €2.50 × 0.75 = €1.88
Extra profit per year: €1.88 × 1,800 × 12 = €40,500
Ways to increase your average order value
Now that you understand the financial impact, you can work strategically toward increasing it. The most effective approaches include:
- Upselling: "Would you like fries with that?" or "Which wine pairs perfectly with this?"
- Menu engineering: Position profitable dishes with high margins more prominently
- Bundling: Create attractive menu combinations or combo deals
- Dessert focus: Actively present your dessert menu (excellent margins)
- Promote beverages: Feature special wines, cocktails, or coffee with treats
⚠️ Note:
Don't simply raise all prices by 10%. That approach can drive customers away. Focus on strategic upselling and high-margin products instead.
Running different scenarios
Smart operators test multiple scenarios before implementing changes. This approach reveals which strategy delivers the biggest return:
💡 Scenario comparison:
Restaurant with 2,000 covers/month, average order value €30:
- Scenario 1: Raise all prices 10% → €36,000 extra/year
- Scenario 2: 50% of guests order dessert (was 20%) → €28,800 extra/year
- Scenario 3: Average 1 extra drink per table → €31,200 extra/year
Measuring the effect and adjusting
Once you've rolled out your measures, tracking results becomes critical. Compare your average order value month-to-month and monitor progress toward your target.
A food cost calculator (like KitchenNmbrs) can automatically track your average order value and identify which measures deliver results. This lets you pivot quickly if something isn't generating the desired effect.
How do you calculate the financial impact? (step by step)
Calculate your current average order value
Divide your total revenue from last month by the number of covers. This gives you the starting point for your calculation.
Calculate the new order value
Multiply your current average order value by 1.10 (for a 10% increase). This is your new target amount per guest.
Calculate the extra revenue per month
Multiply the difference in order value by your number of covers per month. This gives you the extra monthly revenue.
Calculate on an annual basis
Multiply the extra monthly revenue by 12 to see the annual effect. This gives you the total financial impact.
Calculate the impact on profit
Subtract the extra costs from the extra revenue to see how much extra profit you actually keep.
✨ Pro tip
Track your current average order value across different time slots throughout the week for 30 days. You'll discover peak spending patterns that reveal exactly which shifts need the most upselling attention.
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
Is a 10% increase in order value realistic?
Absolutely, especially if you focus on upselling and high-margin products like drinks and desserts. Start with a smaller 5% increase if 10% feels too ambitious initially.
What if I lose customers due to higher prices?
Avoid raising all prices across the board. Instead, focus on strategic upselling - an extra drink or dessert per table feels much less like a price increase to customers.
How do I measure my average order value?
Divide your total revenue by the number of covers served. Track this monthly to spot trends and measure the impact of your initiatives.
Which products give the most profit improvement?
Beverages (especially wine and cocktails) and desserts typically offer the highest margins. Focus your efforts on these categories for maximum profit impact.
📚 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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