The 8 KPIs that actually matter for a restaurant (and how to calculate them)
Average spend, food cost, RevPASH, waste-to-sales ratio... The key indicators for a profitable restaurant, with formulas and industry benchmarks.
A restaurant generates dozens of data points every day: sales by table, consumption by product line, stock turnover, staff hours. The problem isn't a shortage of data — it's knowing which numbers to watch. These eight KPIs are what separate a controlled operation from one running blind.
1. Food Cost (%)
Formula: (Opening inventory + Purchases − Closing inventory) ÷ Sales × 100
Benchmark: 28–35% in the Spanish restaurant industry. Below 28% can indicate small portions or insufficient quality. Above 38%, the financial model is unsustainable without very high prices.
2. Beverage Cost (%)
Same as food cost but applied only to drinks. Benchmark: 18–25%. Beverages carry significantly better margins than food — one of the main reasons bars are financially more resilient than full-service restaurants.
3. Average spend per cover
Formula: Total sales ÷ Number of customers
Average spend on its own tells you little. What matters is how it evolves and what's driving it: is it rising because customers are ordering more dishes, or because you've raised prices? How much is drink contributing to the total?
4. RevPASH (Revenue per Available Seat per Hour)
Formula: Sales ÷ (Number of seats × Hours open)
This is the hospitality equivalent of hotel RevPAR, applied to restaurants. It measures how efficiently you're using your space. A low RevPASH signals empty tables during peak hours or excessively long table turns.
5. Table turn rate
Formula: Number of seatings per table ÷ Period
In a casual dining restaurant, 2–3 turns per service is the target. In quick-service, it can reach 5–6. A low turn rate during peak hours signals a kitchen or floor efficiency problem.
6. Waste as a percentage of sales (%)
Formula: Value of recorded waste ÷ Sales × 100
Benchmark: below 3% is the target. Between 3–6% there's room for improvement. Above 8%, there's a systemic problem requiring immediate attention. This KPI is only useful if you log waste with a reason attached.
7. Labour cost as a percentage of sales (%)
Formula: Total labour cost ÷ Sales × 100
Benchmark: 30–40% in the Spanish restaurant industry. The problem with this KPI is that it swings significantly by day and shift — looking at it only monthly gives you a blurry picture. Analysing it by time slot is far more useful for optimising schedules.
8. Prime Cost
Formula: (Cost of goods + Labour cost) ÷ Sales × 100
Prime cost is the sum of the two largest costs — and the only two an operator directly controls. Benchmark: below 65% is sustainable. Above 70%, the business will struggle to cover fixed costs.
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