9 Important Restaurant KPIs & How to Measure it via Restaurant Analytics

All of us set goals and objectives for us to achieve. But how can we measure the efficiency with which we pursue these goals? This is where the KPIs come in. The KPIs or Key Performance Indicators are the elements that help individuals understand how close they are to achieving their goals. For a restaurant business, KPIs can be a total game changer as it helps the restaurant owners focus on the relevant areas that keep their business afloat and measure how well these areas perform. 

9 Significant Restaurant KPIs that You Should Know

In order to decide on the KPIs that you should focus on, you should first have a clear idea of your restaurant. Meanwhile, let us have a look at some of the most commonly used KPIs in the restaurant business:

9 Significant Restaurant KPIs that You Should Know

1. Labor Cost 

The wages paid to the employee by the restaurant along with any additional allowances and benefits form the core of labor cost. It is one of the most significant costs incurred by a business and can be considered a crucial KPI as well. When we divide the total labor cost by the gross sales that took place in a restaurant, we get the labor cost ratio. 

2. Sales

Yet another crucial element that a restaurant owner must focus on is the sales that take place over a period of time. Two other elements that are closely associated with sales are the gross profit and break-even point. Gross profit is the total amount of money you make after you reduce the costs that are associated with the everyday business from it. The Break-even point gives you a clear idea of how much sales you have to do in order to back your investment. In total, it gives an almost comprehensive idea of where your company stands in terms of its financial position. 

3. Cost of Goods Sold

This parameter varies de[ending on the size and nature of your restaurant. The aim of every restaurant is to decrease the spending on goods without having to compromise on the quality of service offered. A restaurant can track its food cost by calculating the food cost percentage. One can find this out by dividing the total cost of food by the sales that took place during a given day. It makes this factor much easier to track. 

4. Turnover Rate

Are your employees happy with the way they are treated and the work they are given? The turnover rate helps your business understand this question more accurately. Most restaurants face a really high turnover rate and almost all employees leave the restaurant within the second or third month. Understanding the issues faced by the employees and taking remedial measures are the things that a restaurant owner can take for this issue. In order to know how effective these steps are, focus on the turnover ratio. 

5. Prime Cost

Variable costs can be tricky. Keeping track of the same can be even messier. This is why the prime cost is an important KPI for your restaurant business. If you add the cost of total goods sold in your restaurant with the total labor cost of the company, you get the prime cost. If this value comes anywhere between 60 and 65, then your restaurant is doing pretty well. The lesser the prime cost of your restaurant, the better your business shall perform. 

6. Average Table Occupancy

Yet another interesting KPI is the average table occupancy. It essentially gives you an idea of the average number of customers that have visited your restaurant in a given period of time. It can help in getting an idea of how well the seating capacity of the restaurant is being put to use. You can calculate the average table occupancy by dividing the total number of tables occupied by the total number of tables available in the restaurant.

7. Server Benchmarks

Servers form the face of your restaurant. They are the ones who interact directly with the customers and can either make it or break it when it comes to customer service. Tracking the performance of the servers can help identify the ones that aren’t performing well and the servers that do an exceptionally good job. Per-person average helps the restaurant owner calculate the number of sales generated by each server. Total sales made by server divided by total guests the server had attended can give you this value. 

8. Food Wasted

If your restaurant produces more food than necessary and ends up wasting a lot of food, it might be time to have a close look at things. Optimizing your operations to generate only the necessary amount of food is possible if you focus on the percentage of food wasted. All you have to do is divide the weight of wasted food by the total food that has been purchased. Find out the reason why food gets wasted and take the necessary steps to bring it down. 

9. Historical Sales

Focusing on the sales of the current period might not give a comprehensive idea of how well your restaurant is actually performing. In order to get a better idea of the performance of the business, take into consideration the historical sales of the restaurant. Track your KPIs on a yearly basis apart from just tracking them on a daily, weekly, or even monthly basis. 

What is Restaurant Analytics?

It might be useful for you as a business owner to know how well your restaurant is performing in terms of sales and profit. But beyond that, you must be able to have a clear view of how you can improve its performance. In order to do so, you need to gain actionable insights related to different areas of business. In other words, KPIs give you the numbers, and restaurant analytics tell you what these numbers mean. It gives a better idea of what exactly helps run your business successfully and what elements bring it down. Bringing changes to the right place at the right time can give you more immediate and quantifiable results. 

How To Measure Restaurant KPIs with Restaurant Analytics?

There are ample ways in which you can integrate KPIs with restaurant analytics. One of the most resourceful methods among them is to install a restaurant order management system that gives you access to detailed reports that are in-depth and insightful. It is always better to stick to the ones that offer basic yet useful features rather than go for a system that has a lot of features, most of which you do not need. 

Foaps is one such order management system that gives you access to category-wise charts and visual representations of the data collected. These real-time reports will give you a clear idea of how your KPIs are actually doing and what steps you can take in order to make your business boom. 


Let us sum everything up. KPIs are important factors that impact the functioning and success of your restaurant. Decide on what factors you will include as a KPI. It can be the sales of your restaurant, the gross profit, or even the amount of food that has been wasted in your restaurant on a daily basis. Now putting these KPIs into a proper restaurant analytics tool will help you get a better idea of what these numbers mean, along with giving you an idea of what to do with this information. It is crucial to invest in a good restaurant analytics tool as it correctly gauges how your restaurant performs. It can help you identify and build a competitive advantage which is extremely essential in the highly competitive restaurant industry.