Only 23% of restaurant owners track their food costs monthly, yet it's the difference between profit and loss. Most entrepreneurs focus solely on revenue while profit quietly drains through unmonitored expenses. You need eight specific KPIs to build a complete financial picture.
The 8 most important restaurant KPIs
Focus on these figures - you don't need more for a complete picture:
- Revenue: total and average per day
- Number of covers: how many guests you served
- Average check: revenue divided by covers
- Food cost percentage: ingredients as % of revenue
- Labor cost percentage: wages as % of revenue
- Gross profit: revenue minus food and labor costs
- Fixed costs: rent, energy, insurance
- Net profit: what's left for you
💡 Example KPIs restaurant (January):
- Revenue: €45,000
- Covers: 1,800
- Average check: €25.00
- Food cost: 32% (€14,400)
- Labor costs: 28% (€12,600)
- Gross profit: €18,000 (40%)
- Fixed costs: €12,000
- Net profit: €6,000 (13%)
How do you calculate these KPIs correctly?
Food cost percentage: Divide your total ingredient costs by your revenue (excl. VAT) and multiply by 100. Note: always calculate excluding VAT!
Labor cost percentage: Add up all wages, payroll taxes and extras. Divide by revenue excl. VAT and multiply by 100.
⚠️ Watch out:
Many entrepreneurs forget payroll taxes in labor costs. Also include employer contributions, vacation pay and other allowances - that can be 25-30% extra on top of gross wages.
Compare with previous months
A single figure doesn't tell the whole story. Always make comparisons:
- This month vs. last month
- This month vs. same month last year
- Trend over the last 3 months
💡 Example trend analysis:
Food cost development:
- November: 29%
- December: 31%
- January: 32%
Signal: food cost is rising. Why? Supplier prices or larger portions?
Which KPIs are alarming?
From tracking this across dozens of restaurants, these signals demand immediate action:
- Food cost above 35%: ingredients too expensive or portions too large
- Labor costs above 35%: too many staff or wages too high
- Declining average check: guests ordering less or cheaper dishes
- Rising fixed costs: energy bill or other costs going up
Reporting template
Keep it simple. One A4 page with this layout works perfectly:
- Revenue and covers (with comparison to last month)
- Food cost % and amount
- Labor cost % and amount
- Top 3 concerns or improvement points
- Action for next month
💡 Example action plan:
January problems:
- Food cost too high (32%)
- Average check declining (€25 → €23)
February actions: Check portion sizes, verify supplier prices, promote higher-priced dishes
Digital tools for KPI tracking
Excel works, but takes considerable time. Many restaurant owners use apps to track KPIs automatically. You enter your revenue and costs, and the software calculates all percentages.
Advantage: you immediately spot deviations and skip manual calculations. Especially useful for food cost calculations per dish.
How do you set up a KPI report? (step by step)
Gather all figures from the past month
Note your total revenue, number of covers, total ingredient costs and labor costs. Pull these from your POS system and administration.
Calculate the percentages and averages
Food cost % = ingredient costs / revenue excl. VAT × 100. Average check = revenue / number of covers. Do this for all KPIs.
Compare with last month and last year
Put the figures side by side and look for major differences. Increases or decreases of more than 2-3% warrant investigation.
Identify the 3 main points of attention
Which KPIs are off or going the wrong direction? Write down what you think the cause is and what you're going to do about it.
Create an action plan for next month
Concrete actions to solve problems: call suppliers, check portions, adjust menu. Keep it simple and achievable.
✨ Pro tip
Calculate food costs for your 3 highest-volume dishes every 2 weeks - these items drive 60% of your ingredient spending and profit margins.
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
How often should I review KPIs?
Monthly reports work for most restaurants. But check revenue and covers weekly to catch trends early.
What is a good food cost percentage?
Most successful restaurants maintain 28% to 35% food costs. Above 35% usually means you're losing money on ingredients.
Should I include VAT in my KPI calculations?
Never include VAT in your calculations. You're just collecting it for the tax authority - it's not your revenue.
Which KPI matters most for profitability?
Food cost and labor costs combined determine 60-70% of your success. Start monitoring these two religiously.
How do I handle seasonal KPI fluctuations?
Seasonal changes are normal - compare January 2024 to January 2023, not January to December. Look for 3-6 month trends instead of monthly swings.
What's the ideal labor cost percentage for restaurants?
Target 25-30% for labor costs including all taxes and benefits. Fast-casual can run lower, fine dining often runs higher.
How do I calculate food cost for individual menu items?
Track ingredient costs per portion and divide by the dish's selling price. Aim for 25-30% food cost per dish to account for waste and theft.
📚 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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