Essential Yet Overlooked KPIs and Metrics in F&B Operations

KPIs are crucial for monitoring and enhancing a restaurant's qualitative and quantitative performance. By employing these indicators, we can gain essential insights into both the measurable and experiential aspects of our operations, enabling us to implement strategies that boost efficiency, profitability, and customer satisfaction

In the competitive landscape of the restaurant industry, while many managers are versed in common KPIs and Metrics like sales, food and beverage costs, cash flow, the ratio of food and beverage sales, average spend per transaction, and labor costs, there are numerous metrics that often go unnoticed but can offer a more comprehensive understanding of a restaurant’s operations.

As an operations strategist, I have pinpointed 41 vital KPIs that are typically overlooked. These KPIs can uncover hidden areas for enhancement. By exploring these indicators more deeply than the usual daily figures, restaurant managers and owners can obtain deeper operational insights and make strategic decisions that propel growth and success.

Customer-Centric KPIs

1. Customer Retention & Loyalty: Measures retention rate, visit frequency and repeat customer rate.
2. Guest Satisfaction Metrics: Includes online reviews, ratings, CSAT, and NPS.
3. Customer Feedback Response Rate: Tracks responses to customer feedback for improving retention and satisfaction.
4. Individual Tips of Staff: Measures tips as a percentage of total bills to evaluate service quality and customer satisfaction.
5. Online Order Frequency: Tracks the ratio of online to in-person orders to assess digital engagement.
6. Peak Hours Efficiency: Assesses how staff handles operations during busy periods, including service speed and customer wait times.
7. Seating Efficiency: Measures how effectively seating arrangements contribute to increased sales and customer comfort.
8. Customer Demographic Insights: Monitors the demographic profile of customers, including gender and age segments, to tailor marketing strategies and menu offerings.

Operational Efficiency KPIs

1. Table Turnover Rate: Monitors the average table turnover time.
2. Inventory Turnover: Tracks the inventory turnover ratio or stock-to-sales ratio.
3. Food and Beverage Cost Variance: Compares actual vs. theoretical food cost.
4. Service Quality Consistency: Monitors order accuracy rate and average wait time.
5. Food and Beverage Waste & Sustainability: Measures the percentage of food waste by weight or cost.
6. Equipment Downtime: Tracks downtime due to equipment failures.
7. Production Time Per Dish: Monitors the average time taken to prepare each dish.
8. Dishes per Kitchen or Bar Staff: Monitors the output per staff member to assess productivity.
9. Energy Usage Efficiency: Monitors energy consumption relative to sales.
10. Unavailability of Menu Items: Tracks instances when menu items are unavailable.
11. Employee Turnover: Tracks how often staff are replaced, indicating workplace satisfaction and training needs.
12. Voids and Cancelled Transactions Rate: Measures voided or cancelled transactions for operational insights.
13. Check Transfer and Merge Ratios: Monitors check transfers between tables or staff for service insights.
14. Staff Costs on Quieter Shifts: Analyze staffing levels during less busy times for efficiency.

Financial Performance KPIs

1. Average Spend and Number of Transactions Over Time: Develop time-specific KPI trackers to identify exact weaknesses in visit frequency and average spending. This approach will enable you to tailor your menu and service strategies to attract customers throughout different times of the day and week. For instance, monitor average spending and transaction counts during specific hours or periods.
2. Revenue per Available Seat Hour (RevPASH): Calculates revenue by the number of seats and operating hours.
3. Revenue or Profit Per Seat: Assesses the revenue or profit generated per square foot of restaurant space.
4. Prime Cost Ratio: Indicates total costs of goods sold and labour against total sales.
5. Break-even Point: Indicates the minimum amount of revenue needed to cover total costs.
6. Overhead Rate: Tracks how much is spent on fixed costs as a percentage of revenue.
7. Marketing ROI: Calculates return on marketing spend.
8. Customer Acquisition Cost (CAC): Measures the cost of acquiring a new customer.
9. Supplier Performance: Tracks supplier reliability and cost variance.
10. Discount Ratio: Monitors the percentage of sales given as discounts.
11. Employee Individual Sales: Tracks sales by individual employees to identify performance and areas needing training.
12. Food Waste as a Percentage of Food Purchased: Measures food waste against total food purchased to highlight areas for inventory management and portion control improvements.
13. Menu Item Profit: Analyze profitability per menu item to guide pricing and menu design.
14. Menu Penetration and UPT Ratio (Units per Transaction): This KPI tracks the number of items sold per transaction to gauge sales effectiveness and customer preferences for specific items or categories. Assess how frequently a particular item appears in transactions as a percentage of total transactions. For instance, if a Flat White appears on 1% of all bills, determine whether this is favourable or not based on your business model.
15. Health and Safety Incidents: Monitors safety incidents to maintain a safe working environment.
16. Tracking Correct Customer Counts and Average Spend Per Customer (APC): Tracking the precise number of customers visiting the restaurant and their average spending is essential, though this data is often manipulated or untraceable. Ensuring the accuracy of customer data is a critical metric for restaurant management.

Additional KPIs

1. Digital Transformation Progress KPI: Tracks the integration of digital technologies within your restaurant operations, highlighting their impact on business processes and customer value.
2. Competitive Market Position KPI: Provides insights into your market share and competitive standing, emphasizing the need for strategic action and continuous innovation to stay ahead, as echoed by a KPMG study noting 66% of CEOs' concerns about product and service relevance in three years.
3. Learning & Growth Opportunities KPI: LinkedIn’s 2018 report indicates that 94% of employees are more likely to stay at a company that invests in their career development, underscoring the importance of fostering professional growth to reduce turnover and enhance business success in the hospitality sector.