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I've been involved in the restaurant business in almost every aspect, from barback/bartender/waiter to manager to owner/investor in high volume bars, fine-dinin

by crikli 16y ago

I've been involved in the restaurant business in almost every aspect, from barback/bartender/waiter to manager to owner/investor in high volume bars, fine-dining, burger joints, food trucks, and pizza parlors. There's a pretty solid delta between this information and reality when it comes to the "Restaurant Profits" section. 38% is WAY too high for CoGS; reality is closer to 25% to 35%. You won't see 38% food cost unless you're a seafood place that's not selling enough pasta/rice based dishes. Net profits are typically between 4-8%. I'm not going to say a 13% net margin doesn't exist, but I've never seen anything close to that. Best I've seen was almost 10% in a food truck operation that had 35% food cost and almost no facility overhead. There's a reason I'm now in the software business. :)

pitdesi 16y ago
Good to know... information in infographic is from BizMiner, which does a lot of industry benchmarking by industry codes http://www.bizminer.com/Retail/Eating-and-Drinking-Places-5800/ http://www.bizminer.com/Retail/Eating-and-Drinking-Places-58... Those sorts of things can often be wrong but it's taken from filings of 440,148 companies.
silencio 16y ago
Actually, I can find 38% food cost believable right now. Buying, selling and running food service and similar businesses is a side interest of mine, and I've noticed that the reported food cost of businesses for sale in the LA area have been rising in the past couple years. What used to be as low as 25% or lower is now much closer to 38% than to 25% and businesses that report lower tend to be omitting their 2010/2011 invoices from the calculation (like someone's not going to notice?). Rent and wages and people not spending as much money aren't what's cutting into profit today, it's the food cost. For example the other day, a family friend that runs a small burger/sandwich joint raised all her prices by $2 ($5 hot sandwich -> $7, combo meal $7 -> $9) because the meat she buys went from costing $40 a year ago to $100 today for the same amount of meat. That's just an extreme example, but the prices she pays for cases of lettuce and tomato and such have risen and every little bit ends up counting towards that percentage.

by crikli 16y ago

pitdesi 16y ago

Good to know... information in infographic is from BizMiner, which does a lot of industry benchmarking by industry codes http://www.bizminer.com/Retail/Eating-and-Drinking-Places-5800/ http://www.bizminer.com/Retail/Eating-and-Drinking-Places-58... Those sorts of things can often be wrong but it's taken from filings of 440,148 companies.

silencio 16y ago

Actually, I can find 38% food cost believable right now. Buying, selling and running food service and similar businesses is a side interest of mine, and I've noticed that the reported food cost of businesses for sale in the LA area have been rising in the past couple years. What used to be as low as 25% or lower is now much closer to 38% than to 25% and businesses that report lower tend to be omitting their 2010/2011 invoices from the calculation (like someone's not going to notice?). Rent and wages and people not spending as much money aren't what's cutting into profit today, it's the food cost. For example the other day, a family friend that runs a small burger/sandwich joint raised all her prices by $2 ($5 hot sandwich -> $7, combo meal $7 -> $9) because the meat she buys went from costing $40 a year ago to $100 today for the same amount of meat. That's just an extreme example, but the prices she pays for cases of lettuce and tomato and such have risen and every little bit ends up counting towards that percentage.