20+ Essential KPIs Every Restaurant/Cafe Owners Should Track

The restaurant business is a highly competitive and ever-evolving industry, and not every new restaurant/cafe that opens survives.

According to a study from the Bureau of Labor Statistics, the lifespan of a restaurant/cafe in the western US is only 4.5 years.

So, if you want to increase the life and growth of a restaurant/cafe, you must regularly improve the health of your business against the expected goals and objectives. Calculate and interpret the restaurant/cafe KPIs and identify where you’re lacking.

Such metrics will help you find and seal the gap with corrective actions. Still confused, what KPIs to measure?

Well, here we’ve presented a list of restaurant KPIs you must consider. Have a look -:

1. Revenue per Available Seat Hour

Cycle statistics are crucial in determining the rate of usage and revenue generator per ‘seat’ and will also help in planning for food and beverages.

RevPASH means Revenue Per Available Seat Hour, a performance indicator indicating the generated revenue per available seat.

• Formula: RevPASH = Total Revenue/(Number of Seats*Number of Hours Open)

2. Average Check Size

Average Check Size is a key performance indicator (KPI) to determine the average amount customers spend during a single visit or transaction. This metric helps restaurants assess customer spending behavior, pricing strategies, and the business's overall financial performance. **

• Formula: Average Check Size = Total Sales/Number of Customers

3. Table Turnover Rate

This KPI indicates how often a table is occupied during a given time, which is important for assessing how efficiently the restaurant is utilizing its seating capacity.

• Formula: Table Turnover Rate= Number of Customers Served/Number of Tables

4. Loyalty Program Conversion Rate

This measures the percentage of new customers or visitors who take the action you want them to. It indicates how successful your loyalty program was in converting visitors into active participants.

• Formula: Loyalty Program Conversion Rate= (New Members/Total New Customers) * 100

5. Labor Cost Percentage

Restaurant labor cost percentage is the relationship between how much money a restaurant spends on paying employees to the amount of sales achieved in a given period of time.

• Formula: Labor Cost Percentage = (Labor Costs/Total Revenue) * 100

6. Customer Satisfaction Score (CSS)

This KPI measures customer satisfaction based on feedback, surveys, or ratings, and can be an important indicator of the quality of service and dining experience.

• Formula: Customer Satisfaction Score (CSS) = (Sum of Customer Ratings/Total Number of Customers Surveyed) * 100

7. Menu Item Popularity

Menu analysis is important for enhancing overall profitability, menu management, and customer satisfaction.

This KPI helps identify the most frequently ordered menu items, aiding in inventory management and menu design decisions.

• Formula: Menu Item Popularity = (Total Orders/Number of Times an Item Was Ordered) * 100

8. Location Saturation Index

This could be a score based on the number of competitors or traffic within a certain radius of the restaurant. It helps to measure the level of competition or market penetration within a specific geographic area.

• High LSI Indicates a situation where restaurants might struggle to stand out or attract enough customers.

• Low LSI indicates a dearth of growth opportunities.

• Formula: Location Saturation Index = Number of Competitors within X Miles/ Restaurant Location Quality Score (based on foot traffic, visibility, etc.)

9. Service Time per Table

It tracks the average service time per table from seating until they make the bill payment and leave. This metric helps assess the efficiency of service, table turnover rate, and overall customer experience.

• Formula: Time to Table Turnover= Time from Vacated Table to Seated Table/Total Number of Tables

10. Reservation No-Show Rate

Reservation No-Show Rate for restaurants means the no. of the customers reserved a table but did not turn up without notifying the restaurant about it in advance. This metric is very important for the operation and control of activities, increasing the number of seats and at the same time cutting costs of revenues.

• Formula: No-Show Rate = (Number of No-Shows/Total Reservations Made) * 100

11. Customer Retention Rate

Customer Retention Rate (CRR) for restaurants defines the number of customers who revisit the same restaurant to dine within a given period.

• Formula: Customer Retention Rate = (Customers Who Return/Total Customers) * 100

12. Food Yield Efficiency

Do you know how much of each ingredient in your inventory you need to make a dish?

This measures how effectively raw ingredients are converted into served food, minimizing waste. It includes - chopped or peeled vegetables and fruits, or coring.

• Formula: Food Yield Efficiency= (Final Yield (Served Food)/ Raw Ingredients Used) * 100

13. Profit Per Customer

Profit per Customer (PPC) understands the revenue level received from each restaurant customer. This metric gives the restaurant owner information about how well he or she is doing on per-customer levels, which is important for pricing strategy, menu changes, and marketing communication.

• Formula: Profit per Customer = Total Profit/Total Number of Customers

14. Average Order Size (AOS)

Average Order Size (AOS) is one of the restaurant industry's key performance indicators, which shows the average check per customer. It measures the average money spent per customer and helps evaluate the total sales and customer activities.

• Formula: AOS = Total Revenue from Orders/Total Number of Orders

15. Employee turnover

This term is used to describe the turnover rate of your restaurant; the number of your employees who resign in a given period.

Taking into consideration the cost of attracting, selecting, and training new employees, high levels of employee turnover can be financially problematic for your restaurant.

• Formula: Employee turnover = number of employees who left during the period / average number of employees * 100

16. Break-even Point

The break-even point is another important financial figure that shows the amount of sales necessary to fund all possible costs for your restaurant, both fixed and variable ones.

It provides a clear endpoint for financial viability, where restaurateurs are told precisely how much they have to generate in sales to begin turning a profit.

• Formula: Break-Even Point (in units) = Total Fixed Costs / (Selling Price per Unit – Variable Cost per Unit)

17. Gross Profit Margin

Gross profit margin is the percentage of total sales revenue that your restaurant retains after direct costs of producing the goods or services (like food and labor costs).

• Formula: Gross Profit Margin = (Gross Profit / Total Sales Revenue) * 100

18. Net Profit Margin

Your restaurant’s net profit margin shows how much of each dollar earned is converted into profit after all expenses.

This restaurant KPI includes all the expenses incurred by the restaurant, be it the cost of food, personnel, rent, electricity, water, cooking oil and everything in between – which is why it’s important to track your actual net profits.

• Formula: Net Profit Margin = (Net Profit / Total Sales Revenue) * 100

19. Average Covers

Average covers refer to the number of people that come to dine in a restaurant in one day or the number of people the restaurant serves during a certain meal time such as breakfast, Lunch or dinner. Covers tracking assists you to define traffic and demand flow patterns.

This means that both your staffing with employees and your running of the inventory for your restaurant will be in a way that helps improve services and increase profits.

• Formula: Average Cover = Total Sales / Total Number of Customers Served

20. Online Reviews and Reputation Score

Online presence could play a major role in the success of restaurant business in today’s world.

Monitoring your reviews online and keeping a high rating score is paramount to sourcing new clientele and keeping the old ones coming back for more.

This particular KPI will assist you in realizing the attitude of customers and certain issues in the provision of food, service, or setting.

• Formula: Reputation Score = (Sum of All Review Scores / Total Number of Reviews) * 100

21. Energy Efficiency Ratio

Heating, lighting, cooking, cooling and powering the equipment are some of the main uses of energy by restaurants.

This KPI focuses on showing how effectively your restaurant operates in terms of energy use and its overall efficiency.

• Formula: Energy Efficiency Ratio = (Total Energy Costs / Total Sales Revenue) * 100

22. Social Media Engagement Rate

In today’s restaurant business environment, social media plays a significant role in customers’ decisions.

This KPI measures the amount of interaction the brand acquires on social media platforms such as, likes, shares, comments, and followers.

A higher engagement rate means that your marketing messages are getting through to clients and customers, and that your initiatives are successfully promoting your business.

• Formula: Engagement Rate = (Total Interactions / Total Followers) * 100

Conclusion

Restaurant KPIs are your secret weapon that runs your restaurant successfully with prosperity. Make sure you take control of your KPIs and assess it carefully and monitor on a regular basis to identify opportunities for improvement.

If you need professional assistance, call Technoville Consultants NOW !!

Our experts will help you track your performance in various areas and make data-driven decisions that will boost your restaurant business significantly.

Hire now and start optimizing your restaurant’s performance today!