Restaurants with online shops require separate margin calculations for each revenue stream. Your dining operation relies on food costs plus service overhead, while your online channel functions more like retail with packaging and shipping expenses. Calculate both independently to identify your most profitable channel.
Understanding different cost structures
Running both a restaurant and online shop means juggling two distinct business models. Your restaurant carries staff wages, rent, and ingredient costs. But your online operation faces packaging expenses, shipping fees, and inventory risks instead. Each channel demands its own margin strategy to stay profitable.
? Example:
Restaurant sells pasta carbonara for €18.50. Online shop sells the same pasta as a meal kit for €12.95.
- Restaurant: €5.10 ingredients + €8.20 staff/overhead
- Online: €5.10 ingredients + €2.85 packaging/shipping
Restaurant margin: 30% | Online margin: 38%
Calculating restaurant margin
Restaurant margins follow standard hospitality math. Tally your complete cost picture: ingredients, wages, rent, utilities, and operational expenses. Then subtract this total from your revenue.
Restaurant margin formula:
Margin % = ((Revenue - Total costs) / Revenue) × 100
- Food cost: typically 28-35% of revenue
- Staff costs: typically 25-35% of revenue
- Rent and overhead: typically 15-25% of revenue
- Net margin: typically 5-15% of revenue
Calculating online shop margin
Online calculations work differently. You'll skip service staff expenses but add packaging materials, delivery costs, and return risks. Marketing spend for driving web traffic also factors in.
? Example online costs:
Meal kit sold for €12.95 (incl. 9% VAT = €11.88 excl.)
- Ingredients: €5.10
- Packaging: €1.20
- Shipping: €1.65
- Returns/damage: €0.30
- Marketing: €0.95
Total costs: €9.20 | Margin: €2.68 (23%)
Handling VAT correctly
VAT treatment needs careful attention. Restaurant dining and takeaway both carry 9% VAT on food items. However, selling accessories online like cooking tools jumps to 21% VAT.
⚠️ Note:
Always base margin calculations on prices excluding VAT. A €10.90 item including 9% VAT equals €10.00 excluding VAT for your margin math.
Which channel delivers better profits?
Compare net margins per euro of revenue across both channels. From years of working in professional kitchens, restaurants often show lower margins but generate higher order values. Online shops typically achieve better margins but with smaller order sizes.
- Restaurant: lower margin, higher order value, staff-intensive
- Online: better margin, smaller order value, less labor
- Both channels balance each other during slow and busy periods
? Comparison example:
100 restaurant guests vs. 100 online orders
- Restaurant: 100 × €25 = €2,500 revenue, €250 margin (10%)
- Online: 100 × €13 = €1,300 revenue, €299 margin (23%)
Online earns more per order, restaurant earns more per day
Calculating combined margin
Your total business margin combines both revenue streams and their respective margins. Divide your total margin by total revenue to get your blended margin percentage.
Combined margin formula:
Total margin % = ((Restaurant margin + Online margin) / (Restaurant revenue + Online revenue)) × 100
How do you calculate the margin on restaurant + online shop?
Separate restaurant and online costs
Create two separate cost lists. Restaurant: ingredients, staff, rent. Online: ingredients, packaging, shipping, marketing. Some costs (like rent) you divide proportionally.
Calculate margin per channel separately
Restaurant: (revenue - all costs) / revenue × 100. Online: (sales - product - packaging - shipping - marketing) / sales × 100. Use prices excl. VAT.
Compare profitability per euro of revenue
See which channel generates more margin per euro of revenue. Restaurant often has higher order value but lower margin. Online has lower order value but higher margin.
✨ Pro tip
Analyze your top 15 menu items over a 3-month period to see which translate better online versus in-house. Items requiring complex plating or temperature-sensitive sauces rarely work for shipping, while robust stews and build-your-own meal components often perform better online.
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Frequently asked questions
Should I use the same margin for restaurant and online?
How do I divide fixed costs like rent between both channels?
Which channel should I promote more if I want to grow?
Can I use the same recipes for both channels?
What about VAT on online sales?
How do I handle inventory that works for both channels?
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
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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