Nearly 73% of restaurant decisions are still made on gut instinct, yet data-driven operators see 15% higher profit margins. Many hospitality entrepreneurs rely on intuition, but that often leads to wrong assessments about profitability. Here's how to systematically collect and use data to make better decisions.
Why gut feeling can be misleading
Your gut tells you that your busiest dish is also the most profitable. But that's often not true. A dish can be popular because guests love it, while you're actually losing money on it.
⚠️ Watch out:
Popularity isn't the same as profitability. Your best-selling dish can be your worst-earning one.
That's why you need numbers to see what's really happening in your kitchen.
What data do you need?
For solid decisions, you need three types of data:
- Sales data: How much do you sell of each dish?
- Cost data: What do the ingredients really cost?
- Margin data: How much do you earn per dish?
These three together give you the complete picture of your menu.
Collecting data without hassle
Start with your POS system. It shows you sales data: which dishes go over the counter most often. Export these numbers weekly.
💡 Example:
Last week you sold:
- Steak: 45 portions
- Salmon: 32 portions
- Pasta: 28 portions
- Chicken: 23 portions
The steak is clearly your bestseller. But do you earn the most from it?
For cost data, add up all ingredients per dish. Include garnishes, sauces, and everything that goes on the plate.
From data to insight
Combine sales with costs to see your profitability per dish. Calculate for each dish:
- Food cost percentage: (Ingredient costs / Sales price excl. VAT) × 100
- Profit per portion: Sales price excl. VAT - Ingredient costs
- Total profit per dish: Profit per portion × number sold
💡 Example calculation:
Steak (45 portions sold):
- Sales price: €32.00 incl. VAT = €29.36 excl. VAT
- Ingredient costs: €11.50
- Profit per portion: €29.36 - €11.50 = €17.86
- Total profit: €17.86 × 45 = €803.70
Now you see not only what's popular, but also what brings in the most money. Most kitchen managers discover too late that their signature dish - the one they're proudest of - might be bleeding money while a simple side generates surprising profits.
Making decisions based on numbers
With this data, you can make targeted choices:
- Promote profitable dishes: Put your most profitable dishes prominently on the menu
- Adjust prices: Raise the price of popular but low-profit dishes
- Optimize recipes: Replace expensive ingredients with cheaper alternatives
- Remove loss-makers: Take dishes off the menu that sell poorly and bring in little profit
⚠️ Watch out:
Never remove your most popular dish, even if you don't earn much from it. Try adjusting the price or recipe first.
Building a weekly data routine
Make checking numbers a weekly habit. Every Monday you check:
- Sales figures from last week
- Food cost of your top 5 dishes
- Total profit per dish
This takes you 30 minutes a week, but saves you hundreds of euros a month in missed opportunities.
💡 Real-world example:
Restaurant The Golden Spoon discovered through data analysis that their vegetarian curry (20% of sales) had a food cost of 18%, while their signature steak (35% of sales) had 38% food cost.
Action: They promoted the curry more and raised the steak price by €3. Result: €400 extra profit per week.
Digital tools for data collection
Manual tracking quickly becomes a hassle. Many entrepreneurs therefore use systems that automatically calculate food cost and link sales figures to profitability.
This way you see in one dashboard which dishes are real goldmines and which ones cost you money.
How do you build a data-driven decision process?
Collect your basic data
Export your sales data from your POS system weekly. Make a list of your 10 best-selling dishes. Add up all ingredient costs for each dish, including garnishes and sauces.
Calculate profitability per dish
Use the formula: (Ingredient costs / Sales price excl. VAT) × 100 for food cost percentage. Also calculate the absolute profit per portion: sales price excl. VAT minus ingredient costs.
Analyze and take action
Create a matrix of popularity versus profitability. Promote profitable dishes, adjust prices of popular but low-margin items, and consider removing loss-makers.
✨ Pro tip
Pull your POS data every Tuesday morning and calculate the exact food cost for your 7 biggest revenue generators from the previous week. You'll spot profit leaks within 15 minutes that most operators miss for months.
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 check my data?
Check your key numbers weekly. Make it a Monday morning routine to review last week's sales and profitability. This takes 30 minutes but prevents a lot of missed opportunities.
What if my most popular dish isn't very profitable?
Don't remove it immediately - that might drive customers away. Try raising the price by €1-2 first, or replace expensive ingredients with cheaper alternatives. Then measure whether popularity stays the same.
What food cost percentage is acceptable?
For most restaurants, a healthy food cost is between 28-35%. Below 25% might mean you're priced too high, above 35% you're probably losing money on that dish.
Can't I just estimate this without numbers?
Estimating often leads to wrong conclusions. You think popular dishes are profitable, but usually they're not. Only with exact numbers do you see where you really make money.
How do I get reliable cost data?
Keep all supplier invoices and update prices monthly. For each dish, actually add up all ingredients - even small things like spices, oil, and garnishes count.
Should I track seasonal ingredient price fluctuations?
Absolutely, especially for produce-heavy dishes. Asparagus costs can triple between seasons, turning a profitable spring special into a summer loss-maker. Update your calculations monthly for ingredients that swing more than 20%.
📚 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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