Restaurant KPIs 101: 10 Metrics Every Owner Should Track

Running a restaurant isn’t just about great food – it’s also about keeping an eye on the numbers. Key performance indicators (KPIs) help translate your daily operations into data that you can act on. By tracking a handful of essential metrics around sales, costs, efficiency, and customer happiness, you gain insight into what’s working and where to improve.

The goal isn’t to drown you in spreadsheets, but to spotlight areas (like portion sizes or table service speed) that can boost your profitability and guest satisfaction. In this guide, we break down 10 crucial restaurant KPIs in simple terms – what they are, why they matter, how to calculate them, and what “good” looks like for each. These metrics make restaurant analytics approachable for anyone, turning data into a helpful tool rather than a headache.

Top 10 Key Restaurant KPIs Every Owner Should Track

1. Total Sales (Revenue): This is the total money your restaurant brings in from food and drink sales over a given period. It’s the most fundamental gauge of business health – rising sales indicate growth, while slumps can signal issues that need attention. Track revenue daily or weekly and compare it to past performance or targets. For example, watching month-over-month sales trends can reveal seasonality or the impact of promotions. By keeping tabs on sales, you’ll know if you’re on track to cover costs and turn a profit, and you can set realistic goals for growth.

2. Food Cost Percentage (COGS %): Food cost percentage measures how much of your sales revenue is eaten up by the cost of ingredients and beverages. It’s calculated as (Cost of Food Ingredients ÷ Food Sales) × 100. This KPI is critical for profitability – if your food cost % is too high, it means your menu prices or portion controls may need adjustment. Industry averages vary, but typically food cost runs about 28–35% of sales for most restaurants. Monitoring this percentage helps you price menu items appropriately and spot waste or theft. For instance, if a dish’s ingredients cost $3 and it sells for $10, that 30% food cost is reasonable; much higher and your margins will suffer.

3. Labor Cost Percentage: Labor cost % is the share of revenue spent on paying your staff (wages, benefits, taxes). To calculate it, use (Total Labor Costs ÷ Total Sales) × 100. Along with food, labor is a major expense that directly impacts your bottom line. Full-service restaurants often aim for labor costs around 30–35% of sales (quick-service may be a bit lower), though it can range higher or lower depending on your concept. Keeping an eye on this metric helps with scheduling and efficiency – for example, if labor creeps up above your benchmark, you might be overstaffed during slow periods or need to streamline service. By tracking labor %, owners can balance great service with cost control, ensuring staffing levels make sense relative to sales.

4. Net Profit Margin: Profit margin tells you what percentage of your revenue is actual profit after all expenses are paid. In formula terms: (Net Profit ÷ Total Sales) × 100. This KPI is the ultimate measure of sustainability – it shows how much money you keep out of each dollar earned. Net profit margins in the restaurant industry are notoriously slim, averaging only about 3–5% for many restaurants. That means for every $100 in sales, you might only keep a few dollars in profit. Tracking your profit margin (monthly or quarterly) lets you know if you’re truly making money once costs are accounted for. If your margin is low or negative, it’s a red flag to investigate expenses, pricing, or other issues. Even a small increase in profit margin – say from 4% to 6% – can make a big difference to your annual earnings.

5. Average Check Size (Average Order Value): This metric is the average amount each customer spends per order. It’s calculated by dividing your total revenue by the number of orders or guests (e.g. $5,000 in sales ÷ 200 tickets = $25 average check). A higher average check means customers are buying more items or higher-priced dishes each visit. This is great for profitability because you’re increasing revenue without needing to attract more customers. You can grow average check size through upselling (suggesting add-ons like appetizers, drinks, or dessert) and combo deals. Tracking it helps you see if those efforts are working – for example, if you introduce a new combo meal and the average check jumps from $25 to $28, that’s a positive sign. Monitoring this KPI also tells you about guest spending habits and whether there’s room to adjust pricing or promote certain menu items.

6. Table Turnover Rate: Table turnover rate measures how many parties (or dining groups) each table serves during a given period. In simple terms, it answers: “How many times do you ‘turn’ each table per lunch or dinner shift?” It’s calculated as Total Number of Parties Served ÷ Number of Tables in that timeframe. A higher table turnover rate means you’re seating new customers more frequently, which can boost revenue potential. For example, if you have 20 tables and served 60 parties tonight, your average table was used 3 times (a turnover rate of 3). Improving this rate might involve speeding up service or managing seating efficiently – without rushing diners out the door unfairly, of course. This KPI is especially important for busy casual restaurants where maximizing each table’s usage can significantly increase daily sales. If you notice turnover is low (e.g. tables only seat one party per night), you might investigate bottlenecks like slow kitchen times or gaps in your reservation scheduling.

7. Ticket Times (Service Speed): This operational metric tracks how long it takes to deliver an order, from the moment a customer places it to the moment they receive their food. It’s often monitored via your POS or kitchen display system timestamps. Shorter ticket times indicate an efficient kitchen and prompt service. Fast service not only allows you to turn tables quicker but also keeps customers happy – nobody likes waiting too long for their meal. Conversely, long ticket times can hurt guest satisfaction and online reviews. Many restaurants set a target (for example, entrees delivered within 15 minutes of ordering, depending on the style of service). Keeping an eye on average ticket time lets you identify hiccups in the kitchen or workflow. If your ticket times start creeping up, you might need to adjust staffing on the line, prep ingredients in advance, or streamline your menu. Why it matters: smoother, faster service leads to higher customer satisfaction and often better sales (since happy customers are more likely to become repeat customers).

8. Customer Retention Rate (Repeat Visit Rate): Retention rate is the percentage of customers who return to your restaurant over a given period (month, quarter, year). It reflects how well you turn first-time visitors into regulars. A simple way to calculate it is to take the number of customers at the end of a period, subtract new customers acquired, then divide by the number of customers at the start, times 100. For example, if you had 100 unique customers in January and 60 of them came back in February (with some new ones joining too), your retention rate would be 60% for that month. Why focus on this? Because loyal customers are incredibly valuable. Research shows that existing customers tend to spend 31% more than new customers and are 50% more likely to try new menu items. They’re also cheaper to market to (versus constantly acquiring new patrons). If you can boost your repeat visit rate, you’ll likely see higher sales and steady business even without always offering big discounts or ad campaigns. Many successful restaurants use loyalty programs, email newsletters, or simply great hospitality to keep their retention rate high. Even a small uptick in repeat customers can significantly improve profitability over time.

9. Online Reviews & Ratings: In today’s digital age, your restaurant’s online reputation is a KPI you can’t ignore. This metric isn’t a single number you calculate, but rather the aggregate of your customer reviews and average star rating on sites like Yelp, Google, TripAdvisor, and Facebook. It’s critical because the vast majority of diners now check reviews before deciding where to eat – one study found about 93% of consumers read online reviews before making dining decisions. A strong rating (think 4+ stars out of 5) and positive review count correlate with better revenue. In fact, a famous Harvard Business School study showed that a one-star increase in a restaurant’s Yelp rating can lead to a 5–9% boost in revenue. That’s huge! Monitoring your reviews helps you gauge customer satisfaction in real time and respond to issues. Make it a habit to read what people are saying online – look for recurring compliments or complaints. Acknowledging and addressing negative reviews can often win back a guest’s goodwill. Over time, improving service based on feedback and encouraging happy customers to leave reviews will lift your ratings. Since your online reputation heavily influences new customer traffic, it truly functions as a performance indicator (and one that’s very public).

10. Customer Satisfaction Score (CSAT/NPS): Beyond online reviews, many restaurants proactively gather customer feedback through brief surveys – either on receipts, via email, or touchscreen kiosks. These surveys produce a customer satisfaction score (CSAT) or related metric like Net Promoter Score (NPS). For example, you might ask guests to rate their overall satisfaction with their visit on a scale from 1 to 5, or how likely they are to recommend your restaurant to others. You can convert those responses into a percentage of satisfaction. A “good” CSAT score in the restaurant industry is typically around 75–85% (roughly meaning 4 out of 5 customers leave satisfied). Tracking this KPI over time lets you know if changes you implement (new menu items, renovated decor, staff training initiatives, etc.) are improving the guest experience. It’s an early warning system – if satisfaction scores dip, you can investigate why (service issues, food quality, value for price?). High customer satisfaction often translates into better reviews and repeat business, creating a positive cycle. Even if you don’t do formal surveys, paying attention to comment cards or informal feedback can serve a similar purpose. The key is to have some pulse on how happy your customers are beyond just looking at sales figures.

By keeping an eye on these ten KPIs, restaurant owners can move from gut feeling to fact-based decision making. Don’t worry – you don’t need to be a finance expert to benefit from tracking your numbers. Start with a few metrics that align with your goals (for instance, focus on food and labor costs if profitability is a concern, or on retention and online ratings if building a loyal customer base is the priority). Regularly reviewing these indicators helps you spot trends and identify areas for improvement early. If a number is off – say, food cost creeps above your target or reviews dip in rating – you can take action (adjust recipes, retrain staff, etc.) before it hurts your business.

Over time, small tweaks guided by these metrics can lead to significant improvements in efficiency, customer satisfaction, and profitability. Modern tools (like restaurant analytics software from Sauce) can even automate the tracking and alert you to changes, making the whole process easier. The bottom line is that knowledge is power: when you understand your restaurant’s vital signs, you’re better equipped to steer it toward success. Embrace these KPIs as helpful friends, and you’ll find data-driven management isn’t intimidating – it’s empowering and effective. Good luck, and may your sales be high, costs low, and customers smiling!