A typical Amsterdam bistro with €45,000 monthly revenue spends roughly €28,000 on ingredients and staff wages combined. This prime cost ratio of 62% sits right in the healthy range for Dutch bistros. Most successful operations maintain prime costs between 55-65% of total revenue.
What exactly is prime cost?
Prime cost breaks down into two major components:
- Food cost: all ingredients and beverages
- Labor costs: wages, payroll taxes, vacation pay
These expenses directly impact your bottom line more than any other costs. Fixed expenses like rent and utilities don't fluctuate as dramatically with sales volume.
💡 Example bistro:
Monthly revenue: €50,000
- Food cost: €15,000 (30%)
- Labor costs: €17,500 (35%)
Prime cost: €32,500 = 65%
Normal prime cost for bistros in the Netherlands
Successful Dutch bistros typically maintain these percentages:
- Food cost: 28-35% of revenue
- Labor costs: 25-32% of revenue
- Total prime cost: 55-65% of revenue
This leaves room for rent, utilities, and profit margins of 35-45%. You'll need at least 8-12% net profit to sustain healthy operations long-term.
⚠️ Watch out:
Prime costs exceeding 70% typically signal trouble ahead. Your remaining expenses consume another 25-30% of revenue easily.
How do you calculate your prime cost?
Gather these essential numbers first:
- Total revenue (excluding VAT)
- Complete ingredient and beverage expenses
- Gross payroll for all employees
- Payroll taxes (roughly 25% above gross wages)
💡 Calculation example:
Weekly revenue: €12,000 (excl. VAT)
- Ingredients: €3,600
- Gross wages: €3,200
- Payroll taxes: €800
Prime cost: (€3,600 + €3,200 + €800) / €12,000 = 63%
What if your prime cost is too high?
Prime costs above 65% indicate serious profit leakage. From analyzing actual purchasing data across different restaurant types, these issues surface repeatedly:
- Oversized portions: kitchen staff exceed calculated serving sizes
- Overstaffing: particularly during slower service periods
- Stale pricing: menu prices haven't kept pace with ingredient inflation
- Waste blindness: 5-10% of purchases vanish without tracking
Focus on your top 5 menu performers first. If their food costs exceed 35%, you'll see immediate improvement by adjusting prices or portion sizes.
Comparing prime cost with other bistros
Different bistro formats require varying cost structures:
- Lunch-focused bistros: typically run leaner labor costs (25-30%)
- Dinner-only operations: require more intensive staffing (30-35%)
- All-day concepts: average around 28-32% for labor
💡 Benchmark check:
Track your prime cost monthly without fail. Three consecutive months of increases signal structural problems that need immediate attention.
How do you calculate your prime cost? (step by step)
Gather your monthly revenue and costs
Note your total revenue excl. VAT from the previous month. Collect all invoices for ingredients and beverages. Also add up all gross wages of your staff, including yourself if you take a salary.
Calculate your food cost percentage
Divide all ingredient and beverage costs by your revenue excl. VAT and multiply by 100. A healthy food cost for bistros is between 28% and 35%.
Calculate your labor costs percentage
Add gross wages and payroll taxes (approximately 25% extra) together. Divide by your revenue excl. VAT and multiply by 100. For bistros, 25-32% is normal.
Add food cost and labor costs together
Prime cost = food cost % + labor costs %. For a healthy bistro, this is between 55% and 65%. Above 65% it becomes difficult to still make a profit.
✨ Pro tip
Calculate prime cost separately for your top 3 menu categories every 6 weeks. This targeted approach reveals which sections drag down your overall profitability fastest.
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
What is a good prime cost for a small bistro?
Small bistros should target 55-65% prime cost for healthy operations. Anything below 55% indicates excellent control, while costs above 70% threaten profitability.
Should I include VAT in my prime cost calculation?
Never include VAT in your calculations since it flows directly to tax authorities. Always use revenue excluding VAT to get accurate profitability metrics.
What if my prime cost hits 75%?
You're likely operating at a loss and need immediate action. Start by auditing your 5 bestsellers for food costs above 35%, then examine staffing during slow periods. Quick fixes here can save your business.
Do payroll taxes count toward labor costs?
Absolutely - add roughly 25% on top of gross wages for payroll taxes, vacation pay, and pension contributions. These represent real costs that impact your bottom line directly.
📚 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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