How to Measure Restaurant Kitchen Costs and Efficiency

There’s a business saying: ‘if you can’t measure it, you can’t manage it!’

Smart managers need reliable and accurate figures on which to base decisions. If there are problems, you can take corrective action quickly. If you are having success, you’ll know what to do more of! They also give a fuller understanding of what happened – if it’s a quiet month (when  suppliers are telling you ‘everyone’s quiet!’) you may see that some of your KPI’s have improved (eg sales per-head) because you’ve doubled down on service. Well done – its not all doom and gloom!

Here’s a list of KPI’s you’ll want to watch for the Kitchen…

Food Cost % can be measured quickly by adding up food purchases for the week and measuring them against your food sales. This is based on the assumption that you are not holding much stock (as it’s perishable, you need to sell it or throw it out!). You may also do a stock-take regularly to get a more accurate food cost percentage, although the burden of kitchen stocktaking often means it is not done very often.
Total Food Costs – how much was your total food bill? Sometimes a useful figure to show staff who think you are made of money!
Food Costs per-head. It can be useful to see every week how much it costs to feed an average customer – this is an easy figure for your staff to understand. If your menu and sales style is consistent, this should also remain much the same. If it starts to go up, you will have to find out what’s happening! To measure this, use the total amount of food purchased and divide by the number of customers. eg $3000 of purchases divided by 600 customers = $5 per head food costs. If you work out an accurate Stock Value (see below), use that figure instead of purchases.
Kitchen Labour % – it’s only fair to measure kitchen productivity by comparing kitchen labour cost against food sales, not total sales (alcohol and beverage sales may be influenced by other factors).
Kitchen Labour Hours – how many hours worked in this section? Compare against sales to measure productivity, and divide total kitchen labour cost by the number of customers – it can be surprising.
Stock Value – how much food stock are you holding? It should be less than a week’s use, but can slip out if you are storing frozen seafood or cryovac meat. Opening Stock + Purchases – Closing Stock = Cost of Goods Used.
Best and worst selling items – check the weekly sales from your POS or dockets. Do you know what the best sellers were? Should some of the worst sellers be removed?
Kitchen linen costs – the cost of uniforms, aprons and tea-towels can be a shock! How many tea-towels are you using each day? (thought about laundering them yourself?).
Food waste by weight – if you’re watching waste carefully, it’s possible to measure how many bins or kilos you’re throwing out. When it becomes a focus, it’s interesting to see how this can be reduced.
Fuel and water costs – sometimes these can be measured separately for the kitchen. If so, watch the ups and downs, comparing to the number of customers served.

Which of these figures can you access quickly, and which ones are the most useful?