Managing restaurant energy costs is like monitoring a leaky faucet – ignore the drip, and you'll face a flood of unnecessary expenses. Energy represents your third-largest cost after food and labor, yet many owners bury it under 'miscellaneous costs.' This misplacement means losing control of a significant profit driver.
Where do energy costs belong on your P&L?
Energy costs are a direct operational cost item and should NOT go under miscellaneous costs. They deserve their own line on your P&L, just like food cost and labor.
💡 Example P&L structure:
- Revenue: €50.000
- Food cost: €15.000 (30%)
- Labor: €18.000 (36%)
- Energy costs: €2.500 (5%)
- Rent: €4.000 (8%)
- Miscellaneous: €3.000 (6%)
Profit before tax: €7.500 (15%)
What costs fall under energy?
Everything related to electricity, gas and water:
- Electricity: lighting, cooling, dishwasher, oven
- Gas: cooktops, grill, heating
- Water: tap water, dishwashing, cleaning
- Fixed charges: monthly fixed costs
⚠️ Attention:
Only count energy costs for your restaurant. Do you live above your business? Then you need to exclude private consumption.
Normal energy cost percentages
Typical energy costs for restaurants are between 3% and 8% of your revenue. This depends on your kitchen type:
- Cold kitchen (salads, sushi): 3-5%
- Mixed kitchen (bistro, brasserie): 4-6%
- Hot kitchen (grill, fryer): 5-8%
- Bakery or pizzeria: 6-10%
💡 Example calculation:
Restaurant with €40.000 monthly revenue:
- Electricity: €1.200
- Gas: €800
- Water: €300
Total: €2.300 = 5.8% of revenue
This falls within the normal range.
How do you monitor energy costs?
Check your energy percentage monthly. If it suddenly rises, something might be wrong. From analyzing actual purchasing data across different restaurant types, we've seen these common culprits:
- Broken cooling: runs constantly
- Poor insulation: heat leaks away
- Old equipment: uses more than necessary
- Price increases: your supplier became more expensive
Energy savings as profit improvement
Every euro you save on energy goes straight to your profit. At 5% energy costs, 20% savings means:
💡 Impact of energy savings:
Restaurant with €500.000 annual revenue:
- Current energy costs: €25.000 (5%)
- After 20% savings: €20.000
- Extra profit: €5.000 per year
That's €417 extra per month!
Energy cost tracking systems
Modern restaurant management systems let you enter energy costs as a separate line item and automatically calculate percentages against revenue. This way you can immediately see if you're within the normal range and track trends over time.
How do you process energy costs correctly on your P&L?
Gather all energy bills
Get your last 3 months of electricity, gas and water bills. Also add the fixed charges. Make a distinction between business and private consumption if you live above your business.
Calculate the monthly average
Add up all energy costs and divide by 3 for your average monthly costs. Convert this to a percentage of your monthly revenue: (energy costs / revenue) × 100.
Create a separate line on your P&L
Set energy costs as its own cost item between labor and rent. This way you can immediately see the percentage and compare it with previous months. Update this every month.
✨ Pro tip
Track your energy costs weekly during peak summer months when cooling demands spike 40% higher. A restaurant running at 5% energy costs can jump to 7% in July without proper monitoring.
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 put energy costs under miscellaneous costs?
No, energy costs deserve their own line on your P&L. It's a major cost item that you should monitor separately, just like food cost and labor.
What is a normal percentage for energy costs?
For most restaurants this is between 3% and 8% of revenue. Cold kitchens are lower (3-5%), hot kitchens with lots of frying and grilling are higher (5-8%).
How can I lower my energy costs?
Check your cooling (biggest consumer), replace old equipment, insulate well and turn off equipment you're not using. Every saving goes straight to your profit.
Should I include VAT in my energy costs?
No, like other costs you calculate energy costs excluding VAT. You can usually reclaim the VAT from the tax authority.
📚 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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