A low turnover rate means your inventory sits in your cooler too long before it's sold. This costs you money through spoilage, tied-up capital, and often excessive purchasing. Learn here how to calculate your turnover rate and what the numbers mean for your profitability.
What exactly is turnover rate?
Turnover rate (also called stock turnover) shows how many times your inventory is completely replaced through sales. It's one of the most important numbers to know if you're purchasing efficiently.
💡 Example:
You have an average of €5,000 in inventory in your cooler and freezer.
- Monthly purchases: €15,000
- Turnover rate: €15,000 / €5,000 = 3×
Your inventory turns over 3 times per month.
How do you calculate turnover rate?
The formula is simple, but you need two numbers:
Turnover rate = Purchases per period / Average inventory value
- Purchases per period: What you purchased in a month (excl. VAT)
- Average inventory value: Add beginning and end of month, divide by 2
⚠️ Note:
Calculate using purchase prices, not selling prices. You want to know how fast your purchased goods move.
What do the numbers mean?
A lower turnover rate means your inventory stays longer. This has consequences:
- Turnover rate below 2: Inventory sits longer than 2 weeks → risk of spoilage
- Turnover rate 2-4: Healthy range for most restaurants
- Turnover rate above 6: Possibly too little inventory, risk of running out
💡 Example low turnover rate:
Restaurant with turnover rate 1.5 per month:
- Inventory sits for an average of 20 days
- Higher risk of spoilage
- €5,000 capital tied up in inventory
- Less room for fresh products
Why is low turnover rate expensive?
Low turnover rate costs you money in multiple ways:
- Spoilage and waste: Products pass their expiration date
- Tied-up capital: Money sits in inventory instead of in the bank
- Storage space: Cooler full of old products
- Quality loss: Products become less fresh
💡 Cost example:
With €5,000 inventory and turnover rate 1.5:
- 5% spoilage per month = €250
- Capital costs (3% interest) = €150 per year
- Total extra costs = €3,180 per year
How do you improve a low turnover rate?
There are several ways to make your inventory turn faster:
- Order more frequently, smaller quantities: 2× per week instead of 1× per week
- Apply FIFO: First in, first out - use old products first
- Adjust your menu: Promote dishes with slow-moving ingredients
- Change suppliers: Shorter delivery times, more flexible orders
Turnover rate by product category
Not all products have the same turnover rate. Fresh products need to turn faster:
- Fish and meat: Turnover rate 8-12 (every 2-3 days)
- Vegetables and fruit: Turnover rate 4-8 (every 4-7 days)
- Dairy: Turnover rate 3-6 (every 5-10 days)
- Dry goods: Turnover rate 1-2 (every 2-4 weeks)
⚠️ Note:
Measure turnover rate by product category, not just overall. Meat with turnover rate 1 is a problem, but rice with turnover rate 1 is normal.
Digital help with inventory management
Manually tracking inventory values and turnover rates takes a lot of time. Many restaurants therefore use apps like KitchenNmbrs to automatically calculate how much inventory they have and how fast it moves.
This way you can see per ingredient which products stay too long and adjust your purchasing accordingly.
How do you calculate turnover rate? (step by step)
Count your inventory value at the beginning of the month
Go through your cooler, freezer, and dry storage. Add up all products at purchase prices (not selling prices). Note this amount.
Count your inventory value at the end of the month
Do the same at the end of the month. Add up all inventory at purchase prices. Calculate the average: (beginning + end) / 2.
Divide your monthly purchases by average inventory
Take your total purchases for that month (excl. VAT) and divide by your average inventory value. The result is your turnover rate.
✨ Pro tip
Measure turnover rate separately for fresh products (meat, fish, vegetables) and dry goods. Fresh products need to turn much faster than rice or pasta.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Was this article helpful?
Frequently asked questions
What is a good turnover rate for a restaurant?
For most restaurants, a turnover rate between 2-4 per month is healthy. This means your inventory completely turns over every 1-2 weeks.
Can a turnover rate that's too high also be bad?
Yes, with a turnover rate above 6 you risk running out of popular dishes. You then miss sales because guests can't order what they want.
How often should I calculate my turnover rate?
Check this at least monthly, but weekly is better. That way you quickly see if you're ordering too much or certain products are sitting around.
Should I calculate turnover rate per ingredient?
For your most important and expensive ingredients, yes. Meat, fish, and other fresh products need a much higher turnover rate than dry goods.
What if my turnover rate drops below 1?
Then your inventory sits longer than a month. This is problematic - you're buying too much and risk significant spoilage. Order smaller quantities and more frequently.
📚 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.
Manage inventory without spreadsheets
Always know what you have in stock and what it's worth. KitchenNmbrs connects inventory to recipes and purchasing for complete oversight. Start your free trial.
Start free trial →