13 KPIs to track your restaurant performance

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5 min read

13 KPIs to track your restaurant performance

Rebekah Billingsley

Rebekah Billingsley

Apr 29, 2020

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    Restaurants are in the business of food - and as a manager, performance data might not be top of mind. But by tracking some key metrics, you’ll get powerful insights into how your business is really doing - and where to focus your attention.  

    Hospitality is all about numbers. As a restaurant manager, you’re constantly juggling and tallying up the number of staff, customers and food and beverage supplies coming through your doors – hopefully, making it all come together.  

    But when you make the effort to formally track specific performance metrics – you’ll get a 360 degree view of how your business is really doing.  

    With this data, you can decide where to spend more, where to cut back and where you should focus your attention – setting your restaurant up for even greater success.  

    Here’s a quick explanation of key performance indicators - and a list of 13 KPIs to guide you in deciding what to track.  

    Okay, what’s a KPI?  

    Key Performance Indicators are a quantifiable measure of performance. By tracking your performance in certain categories - for example, your rate of staff turnover or how much your customers spend per hour – you’ll get a detailed picture of your overall business performance and whether you’re on track to meet your goals.  

    We’ve narrowed the list down to 13 main KPIs that are most useful to restaurants and hospitality businesses. And we divided them across three categories: 

     

    1. Sales and profitability 
    2. Customer experience 
    3. Marketing  

    Don’t worry, there’s no need to track all 13 – select the ones that fit your business best and are most in line with your goals.  

    Sales and profitability KPIs  

    1. Cash flow 

    You could serve the world’s best food - but if you want to succeed, there’s one ingredient you can’t do without: cash. It’s critical to track how much money comes in and out of your restaurant - and how much cash you have on hand. Find a calculation to help you measure the number of times in a given period that you’re able to pay off your debts with cash you earn in the same period.  

    2. Cost of goods sold 

    Cost of goods sold (or COGS) helps you measure the amount of money that goes into buying supplies and ingredients for your menu. Before you can even think about calculating your restaurant’s profit, you’ll need to know your cost of goods sold in a given period. 

    Here’s how you calculate it:  

    COGS = beginning inventory + purchases during the period – ending inventory 

    3. Labour cost percentage 

    Measure how much you spend on staff wages against your sales to get a stronger sense of your expenses - and whether there’s any need for adjustment. 

    Here’s how you calculate it:  

    Labour cost percentage = amount spent / total sales * 100  

    4. Revenue per available seat hour 

    Known as RevPASH, this calculation measures how much you earn on every seat in your establishment - whether per hour, or per day. Tracking it can highlight areas of improvement - for example, if you’re seeing more guests in groups of 2 or 3, you can change your layout to accommodate smaller tables.  

    Here’s how you calculate it: 

    RevPASH = overall revenue / seats available * open hours 

    5. Table turnover rate 

    A poor table turnover rate can really hit your profits - so keep a close eye on this metric. You’ll want to ensure table turnover is optimally timed so your customers fully enjoy their experience, while new parties aren’t waiting too long for seating.  

    Here’s how to calculate it:  

    Table turnover rate = period of time / number of tables served during that time period 

    6. Average table occupancy 

    This metric tells you how many customers on average visited your restaurant over a specific period.  

    Here’s how to calculate it:  

    Average table occupancy = number of occupied tables / total number of available tables 

    7. Spend per head 

    Use this metric to figure out the average spend of diners in your restaurant.  

    Here’s how to calculate it:  

    Spend per head = total revenue / number of customers 

     

    8. Employee turnover 

    Are your staff regularly handing in their notice and seeking work elsewhere? Given the expense of finding, hiring and training new staff - a high employee turnover rate could prove to be an expensive problem for your restaurant. Tracking it could lead to positive changes – like improving the work culture so staff are more likely to stick around.   

    Here’s how to calculate it:  

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

    Customer experience KPIs 

    A whopping 97% of customers read online reviews before they buy – and people are much more likely to try a new restaurant if they’ve heard good things, whether online or via word-of-mouth. You’re only as good as your reputation - which is why it’s critical you continuously track your customer experience to ensure it’s top-notch. Here’s some KPIs to gauge that:  

    1. Online reviews 

    Stay on top of your online reviews and monitor your average review scores on Google My Business, Facebook, Tripadvisor and Yelp.  

     

    2. Customer retention rate 

    How loyal are your customers? Do they keep coming back? Your customer retention rate helps you determine the percentage of customers you hold on to. Attracting new customers is hard work - so make sure you’re keeping existing ones happy by tracking this metric.  

    Here’s how you calculate it:  

    Customer retention rate = the number of customers at the end of a period – the number of new customers acquired during that period / the number of customers at the start of that period * 100 

     

    Marketing KPIs 

    Your website and social media can be powerful tools in attracting more people to your business. Tracking your online presence lets you quickly see if your promotional efforts are working, or whether you need to change things up with a more thoughtful marketing strategy. Here’s some marketing KPIs to consider:  

    12. Social engagement metrics 

    Social media takes a lot of work – if you’re devoting time and money to it, make sure it’s giving returns. The below metrics measure how much people engage with your restaurant’s social media channels:  

    • Likes: The number of clicks on your post “Like” buttons. 
    • Comments: The number of comments on your posts. 
    • Shares: The number of times a post has been shared on Facebook, retweeted on Twitter or repinned on Pinterest. 
    • Engagement rate: The level of interaction between your audience and your social media account.  

    13. Website traffic metrics 

    Your website should be tirelessly working to attract new customers to your restaurant. These KPI’s show how well your website is performing – and can easily be accessed via Google Analytics.  

    • Sessions by channel: Track the number of people who visit your site through organic searches, referrals, social media, or paid search ads. This helps you see which channels drive traffic to your site - and where to concentrate your efforts.  
    • Website engagement: The bounce rate shows you the percentage of visitors who leave your site after viewing just one page. 
    • Keyword rankings and search traffic: By monitoring your keyword rankings and search traffic, you can gauge whether your restaurant is likely to appear in searches by potential customers.  
    • Conversions: Use call tracking software or Google Analytics to see how many web page views translate into actual restaurant bookings.  

    Phew. It sounds like a lot to think about – but by collecting valuable data on some of these key performance areas, you’ll quickly get a better overview of how well your restaurant is doing – and where it needs improving. And that means you’ll be able to channel your energy where your business needs it most.  

    Want help keeping track of your labour costs? Planday’s reporting feature generates instant reports on employee hours, wages, absences and more – read about it here.

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