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Menu Metrics to Track and Increase Restaurant Profits

Determining the effectiveness of your menu can be challenging at first. Productivity is a key performance indicator for restaurants, measuring the total volume of food sold and the number of guests served to see real results on the success of a menu.

However, managing large sets of data can be challenging for restaurant management teams, making it difficult to identify which pieces of information are most important to the business. Despite the importance of having access to multiple data sets, restaurant analytics and metrics can be overwhelming.

It’s crucial to identify the specific data that’s essential in determining the success of your menu. We’ll be going over metrics you should know to analyze the profitability of your menu so you can continue making adjustments accordingly.

Hospitality, Restaurant, and Bar KPIs to Know

To measure business growth and profitability, restaurants use operational metrics such as profit margin, gross margin percentage, and average customer spending on a monthly or yearly basis among others. You can track these KPIs through customer feedback surveys and guest data through payment information. We don’t mean their personal information, however. Just the information you get from how much they spend, cancellations, and anything else related to how they’re interacting with your restaurant. Let’s take a look in-depth at which KPIs are most useful for your menu.

Analytics and Metrics for Your Restaurant

Restaurant metrics can provide valuable insights by comparing different data sets. This data, when combined with key performance indicators (KPIs), can help identify the strengths and weaknesses of a restaurant's operations, such as staffing levels and menu items that are not selling well. By leveraging this information, restaurant owners can make informed decisions and improve their business performance. Here are some examples of metrics you can leverage for your restaurant or bar:

  • Revenue per available seat hour (RevPASH). Generally used to calculate popular seating times. You can calculate this by doing the following equation: Total revenue for a given time frame / Number of seats available.
  • Food cost percentage. How much your food costs on your menu vs. how much you’re paying to make it. This metric helps you learn more about your profit margins.
  • Labor cost ratio. Compares your labor costs to your revenue. You can determine if you need less labor on staff this way.
  • Average food and beverage cost. The average annual cost of your food and beverage. This can showcase opportunities to increase profit margins. 
  • Customers per table. Determines how full your restaurant or bar is at a given time. You can consider creating happy hour menus and other promotions during slow periods to get more people in the door.
  • Average check per customer. Shows you how much the average guest spends at your restaurant. You can adjust your upsell training with staff if it’s low or encourage guest surveys to find out how to get guests to spend more.
  • Reservations. How often and how far in advance are your reservations made? You can determine if your reservation policy is helping your business and how much revenue comes from reservations.
  • Cancellations. How often do people cancel their reservations? Too many cancellations can hurt your business, so it might be time to make a new reservation policy.

Other Menu Metrics to Be Aware of for Your Restaurant

There are a ton of metrics we could go over, but these are just some extras to consider.

  • Waste. Waste contributes to profit loss and should always be considered when you’re looking at your metrics. If you notice more waste than usual, it’s time to investigate. 
  • Yield. How much of your ingredients do you need to create one plate on your menu? This is another important one, as it helps you determine your menu cost a lot easier.
  • Comped meals. You have to consider all the free food you’ve given away regardless of the reason. You can read more about comped meals in-depth here.

How Provi Can Help Track and Analyze Menu Metrics and Other KPIs at Your Restaurant

Provi is an all-in-one beverage ordering and inventory tracking system. This allows you to view your order history and compare it to your current inventory all in the same place. With an extensive catalog of thousands of brands, you can get the brands you love and try something new. In no time you’ll be able to craft the perfect beverage menu for your bar or restaurant. If you’re interested in seeing for yourself, create a free account with Provi today.

Ryan Philemon


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