Product cost plus labour cost: the figure that weighs most on your result, checked every week.
Restaurant cost control means measuring, every week, what it costs you to produce what you sell and correcting deviations before the month ends. The key figure is prime cost: the sum of product cost and labour cost. At Hostelella, a team with hospitality experience calculates it with you, finds the cause of each deviation and helps you correct it.
Prime cost combines the two largest costs, and the two you can actually manage day to day. Rent and utilities barely change from one week to the next; what you buy and the hours you schedule do. That is why it is read as a percentage of net sales and always compared with previous weeks.
There is no percentage that fits everyone: it depends on the type of venue, the average check and the level of service. What matters is knowing your own figure, setting a reasonable target for your business and seeing whether you are moving toward it or away from it. We set that target with you after the free assessment.
Calculate product and labour cost for the same period. No signup: your figures are calculated in this browser and are not sent to Hostelella.
Sales less prime cost is not net profit: rent, utilities and other expenses still have to be deducted. A negative figure means these two costs already exceed sales.
The difference compares your costs with your own target, holding sales constant. Positive: above target; negative: below target. It is not achieved or guaranteed savings.
Illustrative example: net sales of €20,000, opening inventory of €4,000, purchases of €6,000, closing inventory of €3,000 and labour of €6,000 give a product cost of €7,000 and prime cost of €13,000: 65%. The remaining €7,000 must cover other expenses and profit or loss. With your own target of 60%, costs are €1,000 above target.
Purchases are not the same as consumption: that is why both inventories are included. Without a reliable stock count, the result is also an estimate. This free resource does not calculate recipes or replace accounting close procedures or professional advice.
Is gathering these figures every week taking too long? Organise invoices and delivery notes with Hostelella.
A simple formula, always on sales net of tax.
A fixed slot, the same day, with the same four figures.
Before raising prices, check where product is leaking.
The goal is not to cut people, but to schedule hours where the sales are.
Prime cost is the sum of cost of goods sold (the food and beverage used) and labour cost for a period. It is expressed in money and as a percentage of net sales. It is the most widely used figure to tell whether a restaurant has its costs under control.
There is no universal figure. It varies a lot between a tapas bar, a casual restaurant and fine dining. Rather than comparing yourself with an average, set a realistic target for your model and check every week whether you are getting closer.
Prime cost, every week: that is the interval that still lets you react. Other expenses such as rent, utilities and insurance only need a monthly look. With us, you also go over the whole picture in a monthly meeting.
That is not the starting point. Purchasing, waste, portions and how hours are distributed come first. Many deviations can be corrected without touching product quality or headcount.
Food cost is only the cost of product in relation to sales. Prime cost adds labour. Looking at both avoids false comfort: a labour-intensive dish can have a low food cost and still be expensive in kitchen hours.
Net sales, purchase invoices and delivery notes, an inventory count (even a basic one) and hours worked with their cost. If something is missing, we look at it in the free assessment and tell you where to start.
No. It runs in your browser, without signup and without sending or saving the amounts. It calculates consumption from opening inventory, net purchases and closing inventory, adds labour cost, and compares the total with net sales for the same period.
Request a free assessment and we will look at your starting point with you.