Understanding your restaurant’s performance is the first step toward growing a successful business. By keeping track of restaurant metrics or key restaurant metrics, you can make informed decisions that improve operations, customer experience, and profitability.
These restaurant KPIs (Key Performance Indicators) are measurable factors that provide insight into how well your restaurant is performing. Monitoring them regularly will help you spot trends, identify areas for improvement, and make adjustments that contribute to your success.
Cost of Goods Sold (CoGS)
One of the most significant restaurant metrics to monitor is the Cost of Goods Sold (CoGS). This measures the cost of ingredients used to create your menu items. Keeping an eye on CoGS allows you to assess if your food prices are correct and whether you are managing your inventory well. Ideally, restaurants aim for a CoGS between 20% and 40%, depending on the type of business.
By calculating CoGS regularly, you can spot fluctuations early and adjust your menu or ordering practices accordingly. High CoGS might indicate issues with portion control, rising supplier costs, or menu items that are not priced correctly. Lowering this metric can increase profitability, so it is worth paying close attention to.
Labor Cost Percentage
Labor costs are another key metric for any restaurant. This measures how much of your revenue goes toward paying employees. Restaurant labor typically accounts for 20% to 35% of total sales, but this can vary based on your type of operation. Monitoring your labor cost percentage can help you keep staffing levels aligned with customer traffic and ensure you are not overstaffed during slow periods.
Labor cost is a direct contributor to your prime costs (which also includes CoGS), so it should be closely watched. Efficient scheduling, cross-training employees, and monitoring overtime hours can help control labor costs while maintaining excellent customer service. Using tools like restaurant marketing software and POS systems can also help optimize labor management.
Table Turnover Rate
The table turnover rate is a restaurant KPI that measures how quickly you can serve a customer and get them out of their seats to make room for new guests. A higher turnover rate typically indicates better service and higher sales potential, especially during peak hours.
Tracking table turnover helps you understand peak and off-peak periods, allowing you to adjust staffing or marketing campaigns accordingly. It also gives you insight into how much business you are missing by not efficiently using your available space. This metric is important for restaurants with limited seating or high-demand times.
Customer Satisfaction and Feedback
Customer satisfaction is a fundamental metric that directly impacts repeat business and reputation. Regularly collecting customer feedback—through surveys, online reviews, or even direct comments—gives you valuable insights into what guests think about your food, service, and ambiance.
Customer satisfaction can also be linked to your customer success initiatives. This can include loyalty programs or personalized communication that encourages customers to return. Offering rewards for repeat visits, targeted promotions, or even sending thank-you messages can help foster loyalty and increase lifetime customer value.
Average Check Size
Average check size measures how much customers spend on average during their visit. This is an important metric because it reflects both the effectiveness of your upselling techniques and your pricing strategy. Increasing the average check size is a great way to boost sales without having to increase customer traffic.
Upselling and offering additional menu items like sides, drinks, or desserts can increase the average check size. Understanding the factors that influence this metric, such as menu layout or special offers, allows you to create strategies that encourage customers to spend more per visit.
Break-Even Point
The break-even point is a vital metric that indicates how much revenue you need to generate to cover all your costs. Once you pass this point, you start making a profit. Knowing your break-even point helps you set sales goals, track progress, and make pricing decisions.
Understanding your break-even point helps you make smart decisions about staffing, promotions, and inventory. It also allows you to assess your financial health and understand how much cushion you have before operating at a loss. Being aware of your break-even point ensures you are always working toward profitability.
Food Cost Percentage
Food cost percentage measures the relationship between the cost of ingredients and the selling price of menu items. Keeping this percentage within the ideal range of 20% to 40% is essential for maintaining healthy margins. High food costs may suggest issues with portion control, waste, or supplier prices.
By tracking food cost percentage regularly, you can identify price changes in ingredients, monitor portion sizes, and adjust menu pricing when necessary. This allows you to maintain consistent profit margins, which is vital for the sustainability of your restaurant.
Optimize Your Restaurant’s Performance with App2Food
At App2Food, we understand how vital it is to keep track of your restaurant’s metrics for success. Our mobile app for restaurants offers tools to help you monitor and manage key metrics, including sales performance, labor costs, and customer satisfaction.
With real-time data and actionable insights, App2Food allows you to make informed decisions that improve your operations, boost profits, and elevate your customer experience. Reach out to us today for more information.