Here's what most restaurant owners won't admit: they have no idea if their numbers are actually good or terrible. You might think your 35% food cost is reasonable, but comparable bistros run at 28%. That 7% difference costs you thousands every month.
What are the most important P&L ratios in hospitality?
A P&L (Profit & Loss) shows what percentage of your revenue goes to which costs. These ratios differ by type of business, but clear patterns emerge across similar operations.
💡 Example typical ratios bistro:
- Food cost: 28-32% of revenue
- Personnel costs: 28-35% of revenue
- Rent: 8-12% of revenue
- Other costs: 15-20% of revenue
- Profit before tax: 8-15% of revenue
Gather your own P&L figures
You need at least 12 months of data for meaningful comparison. One-off outliers like renovations or government support will skew your analysis.
- Revenue: Total sales excl. VAT
- Food cost: All ingredients and drinks
- Personnel costs: Wages + social contributions + temporary staff
- Rent and energy: Fixed location costs
- Other costs: Marketing, insurance, depreciation, etc.
⚠️ Note:
Always calculate with revenue excl. VAT. Otherwise your cost percentages will appear lower than they actually are.
Find comparable businesses in your area
Not every hospitality business makes sense to compare. A fine dining restaurant operates with completely different ratios than a lunch café.
- Type of cuisine: Bistro, restaurant, café, pizzeria
- Price level: Budget, mid-range, premium
- Location: City center, residential area, industrial park
- Size: Number of seats and revenue
- Concept: A la carte, menu, buffet
💡 Example comparison:
Your bistro (60 seats, €450,000 revenue):
- Food cost: 35% (too high)
- Personnel: 32% (normal)
- Rent: 9% (good)
Comparable bistros: food cost 28-30%. You're bleeding an extra 5-7% on ingredients.
Industry averages by type of business
These figures serve as guidelines based on Dutch hospitality data. Use them to identify major red flags in your operation.
Casual dining restaurants:
- Food cost: 28-33%
- Personnel: 30-38%
- Rent: 8-15%
- Profit: 5-12%
Cafés and eateries:
- Food cost: 25-30% (more drinks)
- Personnel: 25-32%
- Rent: 10-18%
- Profit: 8-15%
Pizzerias and fast casual:
- Food cost: 22-28%
- Personnel: 22-30%
- Rent: 8-12%
- Profit: 10-18%
Analyze the biggest deviations
Focus on line items where you deviate by more than 3-5 percentage points from comparable businesses. Small differences happen and don't signal problems.
💡 Example analysis:
At €400,000 revenue and 7% higher food cost:
- Extra costs: €400,000 × 0.07 = €28,000 per year
- Per month: €2,333 too much on ingredients
- Possible causes: portions too large, no cost control, expensive suppliers
⚠️ Note:
Don't compare yourself with businesses in much more expensive or cheaper locations. Rent prices vary enormously by city.
What to do about major deviations
If your P&L differs significantly from comparable businesses, tackle the largest cost item first. That's where you'll see the biggest impact on your bottom line - a pattern we see repeatedly in restaurant financials.
Food cost too high (>35%):
- Check cost price of your 10 best-selling dishes
- Measure portion sizes and compare with recipes
- Analyze cutting waste and spoilage
- Compare supplier prices
Personnel costs too high (>40%):
- Calculate revenue per employee per hour
- Check if staffing matches your service levels
- Analyze peaks and valleys in your scheduling
Profit too low (<5%):
- Focus first on food cost and personnel costs
- Check if your menu pricing reflects market rates
- Analyze your best and worst performing dishes
How do you compare your P&L step by step?
Calculate your cost percentages
Divide each cost item by your annual revenue excl. VAT and multiply by 100. For example: €120,000 food cost / €400,000 revenue × 100 = 30% food cost.
Find industry averages for your type of business
Use the figures from this article or ask fellow entrepreneurs. Make sure you compare with businesses of similar size, concept and location.
Identify the biggest deviations
Mark cost items that deviate by more than 5 percentage points. At €400,000 revenue, each percentage point costs you €4,000 per year.
Tackle the biggest cost item first
Start with the item where you're losing the most money. Usually that's food cost or personnel costs. One improved cost item has more impact than five small adjustments.
✨ Pro tip
Compare your revenue per seat over a rolling 6-month period against similar concepts. If you're generating €12,000 per seat annually while competitors hit €18,000, location advantages won't save you.
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
Where do I find reliable industry averages for hospitality?
KHN (Royal Hospitality Netherlands) publishes annual figures. Industry organizations and accounting firms that serve many hospitality businesses also maintain solid benchmarks.
My food cost is 38%, is that always problematic?
Not necessarily. Fine dining restaurants often run higher food costs due to premium ingredients. Look at your complete picture - if personnel costs are lower, it can still work out. Context matters more than isolated percentages.
How often should I compare my P&L with other businesses?
Run a thorough analysis at least once yearly. But check your key ratios monthly (food cost, personnel costs) to catch trends before they become problems.
What if my rent costs are much higher than average?
High rent must be offset by higher revenue per square meter or lower operational costs. Check if your location advantage (more foot traffic, higher check averages) justifies the extra expense.
📚 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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