What is a good prime cost percentage for a restaurant?
A common target for many restaurants is around 55% to 65% of sales, but the right number depends on the concept, service model, pricing structure, and operating style.
7 Proven Ways to Reduce Restaurant Prime Cost
Why Prime Cost Comes First
The reason prime cost deserves constant attention is because it moves daily. Every shift you staff, every order you place, every portion you serve, and every mistake made in the kitchen or front of house affects this number. Unlike fixed costs like rent, prime cost is highly variable and fully influenced by your daily decisions. If you are not actively managing it, it is actively working against your margins.
Many restaurant owners fall into the habit of reviewing prime cost at the end of the month. By that point, the damage is already done. Labor may have been consistently over-scheduled, food waste may have gone unnoticed, or pricing issues may have quietly reduced margins across hundreds of transactions. Looking at prime cost after the fact turns it into a reporting metric instead of a control tool.
To use prime cost effectively, it needs to be treated as an operational priority, not just a financial outcome. This means understanding that controlling prime cost is not about cutting blindly. It is about making better, more precise decisions across scheduling, purchasing, prep, and execution. When managed correctly, prime cost becomes a real-time indicator of how efficiently your restaurant is running.
There are a few key realities every owner should keep in mind -
1. Small percentage changes matter - A 1-2% improvement in prime cost can significantly increase profit, especially in high-volume operations.
2. Volume does not fix inefficiency - Higher sales can still produce weak margins if labor and food costs are not controlled.
3. Problems compound quickly - Minor issues like slight over-portioning or small scheduling inefficiencies can add up across days and weeks into meaningful financial loss.
4. You control the inputs - Unlike external costs, prime cost is driven by internal decisions - making it one of the most controllable levers in your business.
When you treat prime cost as something to monitor daily and adjust proactively, it shifts from being a lagging indicator to a leading one. It tells you not just how your restaurant performed, but where it is heading. And more importantly, it gives you the opportunity to correct course before small inefficiencies turn into larger problems.
This is why reducing prime cost is not about one big change. It is about building consistent habits, improving visibility, and tightening control across the operation.
What Makes Up Prime Cost
Before you can reduce prime cost, you need absolute clarity on what is actually driving it. Too many restaurant owners try to improve prime cost without fully understanding the inputs behind the number. That leads to misdiagnosis, inconsistent decisions, and wasted effort.
Prime cost is made up of two components -
1. Labor Cost (wages, payroll taxes, benefits, overtime)
2. Cost of Goods Sold (COGS) (food, beverage, and other consumable inventory)
On paper, this looks straightforward. In practice, this is where most problems begin.
The first issue is inconsistent classification. For example, managers sometimes exclude certain labor categories like salaried managers, training hours, or overtime adjustments. On the COGS side, missed invoices, incorrect unit conversions, or delayed entries can distort the true cost of product usage. When inputs are incomplete or inconsistent, the prime cost percentage becomes unreliable.
The second issue is timing accuracy. Labor is often tracked daily through scheduling and timekeeping systems, but COGS is frequently updated weekly or even monthly. This mismatch creates a gap in visibility. If you are comparing real-time labor against delayed inventory data, you are not seeing a true picture of your prime cost performance.
The third issue is lack of detail. Looking at total labor cost or total food cost alone is not enough. You need to understand what is happening inside each category -
- Which roles are driving labor cost increases?
- Which menu items are increasing food cost?
- Where are you seeing the most variance between expected and actual usage?
Without this level of detail, prime cost becomes a surface-level metric instead of a decision-making tool.
To build a reliable foundation, focus on these core actions -
1. Labor and COGS - Ensure all locations, managers, and reports follow the same definitions. No exceptions.
2. Improve input accuracy at the source -
Labor - accurate clock-ins, proper role assignment, correct overtime tracking
Inventory - consistent counts, timely invoice entry, correct unit conversions
3. Labor and inventory data - Move toward weekly (or daily, if possible) visibility for both categories so decisions are based on current data, not lagging reports.
4. Break down the numbers - Do not just look at totals. Segment labor by role and COGS by category or key items to identify where pressure is building.
5. Validate your numbers regularly - If your prime cost suddenly shifts, question the data before reacting. Bad inputs can create false problems - or hide real ones.
Prime cost is only useful if it reflects reality. Once you trust the number and understand what is behind it, you can start making precise, targeted improvements instead of broad, reactive changes.
Match Labor to Sales Demand
Many restaurants still schedule based on manager preference, last week's template, or a general sense of how busy the day might be. That approach creates two expensive problems. First, overstaffing adds unnecessary labor hours that sales do not support. Second, understaffing can hurt service, slow table turns, increase mistakes, and lead to burnout or overtime later. Both outcomes weaken prime cost.
To do that well, owners need to look beyond total daily sales and focus on when demand actually happens. A restaurant may do acceptable total sales on paper, but still lose labor efficiency if staffing is too heavy in slow day-parts and too light during the rush. Labor must follow the shape of demand, not just the daily total.
Here are the most practical ways to tighten scheduling around real sales demand -
1. Forecasted sales, not assumptions - Use historical sales by day, day-part, and season to estimate expected demand. A better forecast leads to a better labor plan.
2. Schedule by business volume - Many managers repeat the same schedule each week even when sales patterns change. Templates can save time, but they should not replace planning.
3. Watch labor by day-part - A full day can look properly staffed overall while still being inefficient during specific hours. Prime cost improves when labor is matched to the actual pace of business throughout the shift.
4. Control overtime - Overtime is one of the quickest ways to push labor cost higher. Review hours in progress, not just completed payroll, so managers can adjust before extra cost hits.
5. Use role-level visibility - Not every labor hour carries the same value. Track labor by position so you can see where cost is climbing and whether it is tied to real operational need.
6. Adjust schedules - Forecasts are not perfect. If traffic is clearly trending above or below plan, managers should respond in real time instead of letting the original schedule stay untouched.
7. Measure productivity - Metrics like sales per labor hour help show whether the team is actually productive, not just whether labor looks acceptable as a percentage.
The most important shift is this - labor scheduling should be treated as a cost-control process, not just a staffing task. Every extra hour, every unnecessary overlap, and every preventable overtime decision directly affects prime cost.
When labor is aligned to real demand, the restaurant runs with better control. Service stays more stable, managers make fewer reactive decisions, and payroll becomes more predictable. That makes scheduling one of the most practical and immediate levers owners can use to reduce prime cost.
Reduce Food Cost Variance
Many owners assume inventory issues begin in the storeroom. In reality, they start much earlier. They begin when recipes are not followed consistently, when prep is overproduced, when counts are rushed, or when purchasing decisions are made without a clear view of actual usage. By the time the financial reports show the impact, margin has already been lost.
To reduce food cost variance, focus on these practical areas -
1. Tighten count accuracy - Inventory counts are only useful if they are consistent and reliable. If counts are rushed, estimated, or done using different units each time, the data becomes weak. Consistent counting methods create a stronger baseline for decision-making.
2. Improve invoice entry discipline - If invoices are entered late, entered incorrectly, or not matched properly to the correct units and categories, your food cost reporting becomes distorted. Accurate invoice entry is essential for understanding true product cost.
3. Control portioning - Small over-portioning errors do not feel significant in the moment, but they add up quickly across hundreds of orders. Standard portions protect margin and create more predictable food cost.
4. Track waste and spoilage - Waste should not be treated as a vague operational issue. It should be measured. If product is expiring, being over-prepped, or thrown away after service, that cost needs to be visible and reviewed regularly.
5. Compare theoretical usage to actual usage - This is one of the most useful ways to identify food cost problems. Theoretical usage shows what product should have been used based on sales. Actual usage shows what was really consumed. The gap between the two often reveals waste, theft, prep loss, or process inconsistency.
6. Review ordering against real demand - Over-ordering ties up cash and increases spoilage risk. Under-ordering creates shortages, rushed substitutions, and operational disruption. Strong ordering decisions depend on accurate on-hand inventory, sales trends, and realistic par levels.
7. Recipes and prep procedures - If different employees prep or plate the same item differently, food cost becomes unstable. Recipe discipline is not just about food quality. It is also a direct control point for prime cost.
The bigger point is that food cost problems are rarely caused by one large failure. They usually come from repeated small inconsistencies across ordering, receiving, prep, counting, and execution. Each one may seem manageable on its own. Together, they can create a serious margin problem.
When inventory control improves, food cost becomes more stable, purchasing becomes more accurate, and prime cost becomes easier to manage. That is why reducing food cost variance is not just about better counting. It is about creating a tighter operational system that protects every dollar tied to product.
Fix Menu and Pricing Decisions
A restaurant can stay busy and still struggle with prime cost. One of the biggest reasons is poor menu and pricing decisions. Sales volume alone does not protect profitability. If too much of your revenue comes from low-margin items, underpriced items, or products with unstable food cost, prime cost stays under pressure no matter how hard the team works.
This is where many owners lose visibility. They look at total sales and assume strong demand means the menu is performing well. But high sales can hide weak margins. A popular item is not always a profitable item, and an item that sells consistently may still be hurting overall prime cost if its plate cost is too high or its pricing has not kept pace with ingredient inflation.
To reduce prime cost, menu and pricing decisions need to be reviewed as operating decisions, not just marketing decisions. What you sell, how you price it, and how often guests choose it all affect margin.
Focus on these areas -
1. Review plate cost regularly - Ingredient prices change. If recipe costs are not updated, pricing decisions quickly become outdated. Owners need current plate cost data to understand which items are helping margins and which are dragging them down.
2. Look beyond popularity - Strong sales volume does not automatically mean strong profit. What matters is how much gross profit each item contributes after food cost. Popular low-margin items can quietly weaken prime cost if they dominate the mix.
3. Evaluate product mix - Prime cost is shaped by what guests buy most often. If the menu mix is too heavily weighted toward lower-margin categories, the business may look healthy on the surface while profitability stays tight underneath.
4. Adjust pricing with discipline - Many restaurants delay price changes too long because they worry about guest reaction. But failing to price appropriately can be more damaging than making small, strategic adjustments. Pricing should reflect current costs, market conditions, and perceived value.
5. Watch for menu complexity - A menu with too many items, too many unique ingredients, or too much prep complexity can raise both food and labor cost. That means menu design affects both sides of prime cost, not just COGS.
6. Identify low-margin items - Some items do not just produce weak margin. They also slow down the kitchen, increase waste risk, or require extra prep labor. These items can hurt prime cost from multiple angles.
7. Use data to guide menu decisions - Owners should review item sales, food cost percentage, contribution margin, and product mix together. Looking at only one of these numbers creates an incomplete picture.
When menu and pricing decisions are reviewed consistently, owners gain a clearer view of where profitability is being created and where it is being lost. That makes prime cost easier to control because the business stops relying on volume alone and starts improving the quality of its revenue.
Limit Waste in Daily Operations
Prime cost does not rise only because of big problems. In many restaurants, it rises because of small operational mistakes that happen repeatedly throughout the day. A remake here, a comp there, a tray of over-prepped food thrown out at close, an order entered incorrectly, or a line cook using inconsistent portions may not seem serious in isolation. But across a week or month, these routine breakdowns create measurable cost pressure.
This is what makes waste, errors, and rework so dangerous. They often feel like normal operating friction, so they go unmeasured and uncorrected. Meanwhile, they affect both sides of prime cost. Product gets wasted, and labor gets spent fixing problems that should not have happened in the first place.
Owners who want to reduce prime cost need to look beyond labor schedules and food purchases. They also need to examine how often the operation is paying twice for the same work - once to do it, and again to fix it.
Here are the most common daily issues that push prime cost higher -
1. Remakes - Incorrect builds, wrong temperatures, missing modifiers, and communication breakdowns all create remakes. Each remake adds extra food cost and extra labor with no new revenue attached.
2. Comps and voids - Some comps are legitimate service recovery tools, but frequent comps and voids often point to process issues. If they are not reviewed, they become recurring leaks in margin.
3. Overproduction and prep waste - Prep that is not aligned with actual demand often ends in spoilage or unnecessary discard. This usually comes from weak forecasting, inconsistent pars, or poor communication between managers and kitchen teams.
4. Portion inconsistency - Even small deviations in portion size can increase food cost quickly, especially on high-volume items. Without portion control, theoretical food cost stops matching reality.
5. Order entry mistakes - Errors at the POS or in verbal communication create avoidable waste and rework. The issue is not just the wrong order. It is the extra time, product, and disruption that follow.
6. Process inconsistency - When one team follows standards and another does not, cost control becomes unstable. The same menu item can produce different cost outcomes depending on who is working.
7. Lack of daily accountability - Waste stays expensive when it is not reviewed. If managers are not tracking where losses are happening, the same issues repeat without correction.
The most effective way to reduce these losses is to make them visible. That means reviewing waste, comps, voids, remakes, and prep loss as operational metrics - not just accepting them as part of restaurant life.
Owners should ask clear questions every week -
- Which items are being remade most often?
- Where is waste happening by shift or station?
- Are comps tied to service breakdowns, product quality issues, or order accuracy problems?
- Which processes are creating repeatable mistakes?
When restaurants reduce waste, improve execution, and tighten accountability, prime cost improves in a very practical way. Less product is thrown away, fewer labor hours are wasted on corrections, and the operation becomes more predictable. That is how daily discipline turns into financial control.
Track the Right Metrics
One of the biggest mistakes restaurant owners make with prime cost is waiting too long to review it. If you only look at labor cost, food cost, and prime cost at month-end, you are managing after the fact. By then, over-scheduling, waste, pricing gaps, and process issues may have already affected dozens of shifts and hundreds of transactions. The number may explain what happened, but it is too late to correct it quickly.
Prime cost has to be monitored often enough to influence decisions while there is still time to act. That is why weekly tracking matters. In stronger operations, some of these numbers are reviewed daily. The point is not to create more reports for the sake of reporting. The point is to shorten the gap between a problem starting and management responding.
To do that, owners need to track metrics that actually reveal what is driving prime cost, not just high-level totals.
Focus on these core metrics -
1. Prime cost % - This is the combined view of labor cost and cost of goods sold as a percentage of sales. It is the main number, but it should never be reviewed in isolation.
2. Labor cost % - This helps show whether payroll is staying aligned with sales. If labor is rising faster than revenue, scheduling, productivity, or overtime may be the issue.
3. Food cost % - This reveals whether product usage is staying under control. Sudden shifts may point to waste, portion inconsistency, price increases, theft, or poor inventory practices.
4. Sales per labor hour - This metric shows how productive labor actually is. It helps owners see whether staffing levels are creating enough return relative to sales volume.
5. Overtime hours and dollars - Overtime should be tracked before payroll closes, not just afterward. This gives managers a chance to make adjustments before costs climb further.
6. Waste, comps, voids, and remakes - These are early warning signs of process breakdowns. They often explain why food cost or labor cost is drifting higher.
7. Theoretical vs actual usage - This helps identify where product loss is happening. It is one of the clearest ways to find hidden cost issues inside food operations.
8. Menu mix and contribution margin - If sales are strong but prime cost is not improving, the issue may be what guests are buying rather than how much they are buying.
The real value of these metrics comes from reviewing them together. A high labor cost percentage might not mean scheduling is poor if sales were unexpectedly soft. A rise in food cost might not be a purchasing issue if remakes and waste also increased. Good decisions come from pattern recognition, not from reacting to one disconnected number.
That is why weekly reviews are so important. They create enough frequency to catch trends early without waiting for the month to close. Owners can spot whether a problem is isolated, recurring, or accelerating. More importantly, they can respond while the cost is still manageable.
Build a Prime Cost System
Reducing prime cost is not about chasing one improvement at a time. It is about building an operating system that helps your restaurant control labor and product costs on a consistent basis. Without that kind of structure, most gains are short-lived. A schedule may look better this week. Ordering may tighten for a few days. Waste may drop temporarily after a meeting. But if the process is not repeatable, prime cost usually rises again.
That is why long-term improvement depends on three things- visibility, accountability, and routine.
First, owners need clear visibility into the numbers that actually drive prime cost. That includes labor cost, food cost, sales, waste, overtime, inventory variance, and menu performance. If that information is delayed, inconsistent, or buried in disconnected systems, it becomes harder to make fast, accurate decisions. Prime cost should be something you can actively manage, not something you review after the margin has already been lost.
Second, each part of prime cost needs accountability. Scheduling decisions need oversight. Inventory counts need consistency. Portion control needs enforcement. Waste, comps, remakes, and overtime need to be reviewed regularly. When these areas are left to habit instead of discipline, cost control becomes unstable.
Third, strong routines matter. Weekly prime cost reviews, daily labor adjustments, accurate invoice entry, recipe adherence, and ongoing menu evaluation all help create a more controlled operation. These are not extra tasks. They are the habits that protect margin.
The most effective way to lower prime cost is not to cut blindly. It is to make better decisions with better data, better processes, and better follow-through. The goal is to protect profitability without creating new service problems, quality issues, or operational stress.
That is where the right restaurant technology can make a measurable difference. If you want to reduce prime cost more consistently, you need tools that help you see problems earlier, respond faster, and manage the operation with more precision. Altametrics helps restaurant operators bring labor, inventory, reporting, forecasting, and daily controls into a more connected system so prime cost is easier to track and improve. Instead of relying on scattered spreadsheets, delayed reports, or manual follow-up, restaurant owners can gain better visibility into the numbers that matter most and make stronger decisions before small inefficiencies become bigger margin problems.
If your goal is to lower labor cost, improve food cost control, tighten reporting, and run a more disciplined operation overall, explore how Altametrics can help support that process by clicking "Request a Demo" below.
Efficient Ordering at Your Fingertips
Experience Flawless Inventory Management with Altametrics
Restaurant management
Cost Management for Multi-Location Restaurants
Restaurant management
AI Tools Every Restaurant Owner Should Understand
Food safety
Restaurant Food Safety Regulations by State
Inventory management
The Complete Guide to Restaurant Supply Management
Employee scheduling
How to Create a Positive Team Culture in a Busy Restaurant
Restaurant management
Top 10 Apps for Restaurant Operations
Restaurant management
7 Proven Ways to Reduce Restaurant Prime Cost
Restaurant management
How to Maintain Consistency Across Restaurant Locations
Sales forecasting
How to Use POS Data to Forecast Restaurant Sales
Employee scheduling
Why Your Restaurant Turnover Rate Is So High
Employee scheduling
HR Management Strategies for Restaurant Staff Retention
Accounting payroll
5 Ways Automated Accounting Protects Restaurant Profit Margins
Accounting payroll
How to Set Clear Tipping Guidelines for Restaurant Staff
Sales forecasting
Demand Planning for Restaurants Based on Sales Trends
Employee scheduling
Key Features to Look for in Employee Apps for Restaurants
Inventory management
Guide to Restaurant Par Levels and Reordering
Restaurant management
The Complete Guide to Restaurant Management Systems
Inventory management
A Practical Waste and Variance Tracking System for Restaurants
Food safety
Food Handling Guidelines for Restaurants in 2026
Employee scheduling
How to Create a Hiring Process for Hotel Staff
Sales forecasting
Restaurant Reporting Metrics Owners Should Watch During Recovery
Software integration
What Restaurant Tasks Can You Automate?
Accounting payroll
A Practical Guide to Restaurant Budgeting and Forecasting
Accounting payroll
How to Master Restaurant Bookkeeping
Accounting payroll
What Is a Good Average Profit Margin for a Restaurant?
Restaurant management
How to Write a Restaurant Mission Statement
Employee scheduling
Restaurant Hiring Tips That Reduce Turnover
Accounting payroll
How to Get Approved for Restaurant Financing
Software integration
Why Restaurants Need POS Integration for Labor Costs and Scheduling
Accounting payroll
How to Calculate Restaurant Payroll Percentage
Food safety
Health Inspection Prep Checklist
Inventory management
6 Fast Food Inventory Metrics That Keep Food Cost in Check
Food safety
Food Safety Checklist for Restaurants
Employee scheduling
Restaurant Staff Training Checklist
Restaurant management
How to Tell If Your Restaurant Has Outgrown Its Tech Stack
Restaurant management
What Restaurant Technology Improves the Dining Experience?
Restaurant management
How to Cut Overtime in Restaurants
Restaurant management
How Restaurant Inventory Software Helps Control Food Costs
Accounting payroll
The 5 Core Financial Projections Every New Restaurant Needs
Restaurant management
Restaurant Staff Training Guide
Restaurant management
Restaurant KPI Basics Every Owner Should Track
Restaurant management
The Basics of Back of the House Management for Restaurants
Inventory management
What Are Typical Restaurant Fixed Costs?
Restaurant management
How to Calculate Your Restaurant Break-Even Point
Restaurant management,sales forecasting,pos systems
Loyalty Program Ideas For Restaurants
Employee scheduling
The Hidden Cost of Labor Inaccuracy And Why It Explodes in Q1
Accounting payroll
Tip Management Basics for Restaurant Owners
Restaurant management
How to Set Up Par Levels in a Restaurant
Restaurant management
How To Increase Restaurant Sales
Employee scheduling
How to Schedule Employees Effectively for Your Restaurant
Restaurant management
Which California Licenses and Permits Are Required for Restaurants?
Restaurant management
How QR Codes Transform Restaurant Guest Experience
Restaurant management
Restaurant Management Tools Every Owner Needs
Employee scheduling
How to Spot and Prevent Time Theft in Your Restaurant
Restaurant management
How to Increase Restaurant Foot Traffic
Restaurant management
How to Increase Employee Productivity in Your Restaurant
Accounting payroll
California Tip Law - Tip Sharing Rules for Restaurants
Accounting payroll
7 Simple Steps to Build a Restaurant Budget
Restaurant management
How to Improve Team Communication Between FOH and BOH
Restaurant management
How to Build a Local Restaurant Marketing Plan
Accounting payroll
How to Build a Restaurant Chart of Accounts
Sales forecasting
How to Build Engaging Customer Loyalty Programs for Restaurants
Restaurant management
Restaurant Operations Management Made Simple
Restaurant management
Simple KPIs for Multiple Restaurant Locations
Accounting payroll
How to Track Time Accurately for Hourly Restaurant Staff
Restaurant management
Cost Control Guide for Restaurants
Restaurant management
The Ultimate Restaurant Kitchen Design Plan
Sales forecasting
How to Set Up a Restaurant Gift Card Program
Employee scheduling
Are You Following US Labor Laws in Your Restaurant?
Software integration,restaurant management,sales forecasting
How to Design High End Restaurant Loyalty Programs
Sales forecasting
The Essential Steps Involved in Sales Forecasting for Restaurants
Inventory management
The 6 Types of Inventory Management Reports for Restaurants
Restaurant management
Essential CCP Food Handling Procedures Every Restaurant Must Follow
Employee scheduling
The Complete Guide to Efficient Employee Scheduling for Restaurants
Sales forecasting
The Different Methods of Sales Forecasting for Restaurants
Inventory management
What are the four types of inventory management for restaurants?
Restaurant management
Daily Cash Control Checklist for Restaurant Owners
Inventory management
Restaurant Financial Statements Explained
Restaurant management
How Technology Helps Restaurants Cut Food Waste
Inventory management
Top Inventory Management Strategies for Restaurants
Inventory management
How to Build a Restaurant Inventory Management Process from Scratch
Food safety
Food Safety Practices for Small Restaurants
Restaurant management
The Complete Guide to Restaurant Waste Management for Owners
Employee scheduling
The Complete Guide to Restaurant Employee Benefits
Accounting payroll
5 Signs Your Hotel Needs to Upgrade Its Payment Processing System
Restaurant management
The Ultimate Daily Checklist for Restaurant Owners
Accounting payroll
Are You Over-complicating Your Restaurants Payroll Process?
Inventory management
Is Your Inventory Management Costing You Profits?
Employee scheduling
How Can Smart Scheduling Transform Your Restaurant's Efficiency?
Restaurant management
What Are the Best Email Marketing Campaign Ideas for Restaurants in 2025?
Restaurant management
How Can You Maintain Brand Consistency Across Multiple Franchise Locations?
Employee scheduling
How Can Restaurants Prevent Scheduling Conflicts and Last-Minute Absences?
Restaurant management
What's the Most Efficient Way to Manage Tasks in a Busy Restaurant?
Employee scheduling
What Should You Look for When Interviewing Restaurant Staff?
Restaurant management
What Is a Dram Shop Law and How Does It Affect Your Restaurant?
Restaurant management
What Features Should Every Restaurant Ordering System Have in 2025?
Accounting payroll
What Are the Most Cost-Effective Ways to Reduce Waste in a Restaurant?
Inventory management
Are Your Menu Items Costing You More Than They're Worth?
Accounting payroll
How Do You Handle Overtime and Tip Credit in Restaurant Payroll?
Accounting payroll
Are You Spending Too Much Time on Payroll? Here's How to Fix it
Inventory management
How Can I Implement an Effective Inventory Management System in my Restaurant?
Sales forecasting
What Do Consumer Reports Say About Your Menu?
Inventory management
What Are the Main Inventory Costing Methods for Restaurants?
Restaurant management
How to Streamline Your Restaurants Supply Chain
Restaurant management
How to Optimize Order Fulfillment in Your Restaurant
Employee scheduling
How to Design an Effective Employee Training Program for Restaurants
Restaurant management
9 Essential Workforce Management Tools Every Restaurant Needs
Accounting payroll
How to Read and Use Your Restaurants Profit and Loss Statement
Accounting payroll
How to Organize Your Restaurant's Financial Records Efficiently
Accounting payroll
Restaurant Billing 101 - Simplify Your Finances and Boost Efficiency
Accounting payroll
The Ultimate Guide to Accounts Payable Automation for Restaurant Owners
Accounting payroll
Benefits of Accounts Receivable Automation for Restaurants
Accounting payroll
The Ultimate Guide to Restaurant Accounting
Accounting payroll
Restaurant Bookkeeping 101 - A Beginner's Guide for Restaurant Owners
Accounting payroll
Invoice Management 101 - A Simple Guide for Restaurant Owners
Restaurant management
What Are Par Levels and Why Every Restaurant Owner Should Care
Sales forecasting
Top 5 Consumer Metrics Every Restaurant Should Track
Inventory management
Which Inventory Method is Best for Your Restaurant?
Accounting payroll
Setting Up an Employee Loan Program in Your Restaurant
Employee scheduling
The Ultimate Employee Onboarding Checklist for Restaurant Owners
Accounting payroll
Top 7 Payroll Mistakes Restaurant Owners Should Avoid
Accounting payroll
How to Calculate Food Cost Variance in Your Restaurant
Sales forecasting
A Guide to Understanding Customer Behavior in Restaurants
Inventory management
What is the Perpetual Inventory Method? A Beginner's Guide for Restaurant Owners
Restaurant management
How to Use Customer Data to Personalize the Dining Experience and Build Loyalty
Employee scheduling
5 Key Steps to Streamline Your Restaurant's Employee Onboarding Process
Restaurant management
Top 10 California Employment Laws Every Restaurant Owner Must Know
Restaurant management
How to Create Custom Recipe Templates for Your Restaurant Kitchen
Restaurant management
5 Practical Strategies to Cut Food Waste in Your Restaurant
Restaurant management
Understanding Restaurant Food Cost Percentage in 2025 - Strategies for Profitability
Inventory management
The Restaurant Owner's Guide to Streamlining Supply Chain Processes
Restaurant management
How to Efficiently Calculate and Manage Labor Cost in Restaurants
Food safety
General Food Safety Guidelines for Restaurants
Inventory management
A Guide for Restaurant Food Suppliers
Employee scheduling
Key Elements of a Successful Restaurant Scheduling System
Restaurant management
How to Reduce Labor Costs in Your Restaurant Without Sacrificing Service
Inventory management
5 Best Practices for Food Inventory Management to Reduce Waste
Employee scheduling
Understanding California Overtime Laws for Restaurants
Employee scheduling
Top Features to Look for in an Electronic Time Clock for Restaurants
Restaurant management
The Best Employee Rewards Programs for Restaurants
Employee scheduling
The Best Time Keeping Methods for Restaurants
Employee scheduling
How a Restaurant Scheduling App Helps You Avoid Common Scheduling Mistakes
Employee scheduling
Features to Look for in a Clock-In Machine for Restaurants
Employee scheduling
How to Improve Time and Attendance Tracking in Your Restaurant
Employee scheduling
How California Work Week Laws Affect Restaurant Scheduling
Accounting payroll
Best Practices for Calculating Payroll Hours in Restaurants
Employee scheduling
How to Prevent Time Theft in Your Restaurant
Restaurant management
How Technology Can Improve Employee Management in Restaurants
Employee scheduling
California Employment Laws Every Hotel Owner Should Know in 2025
Restaurant management
California's Updated Overtime and Break Laws for Restaurants
Employee scheduling
10 Essential Work Schedules for Running a Smooth Restaurant Operation
Employee scheduling
How to Accurately Calculate Work Hours for Your Restaurant Staff
Employee scheduling
Best Practices for Managing Employee Time and Attendance in Restaurants
Employee scheduling
How to Create an Efficient Restaurant Weekly Schedule That Boosts Productivity
Software integration
Top 5 Benefits of Automating Your Business Workflows
Software integration
The Role of AI in Business Process Automation
Software integration
The Power of API Integrations - Connecting Your Business Tools Seamlessly
Software integration
The Importance of Seamless Integrations in Today's Business Landscape
Software integration
How Workflow Automation Can Save Small Businesses Thousands of Dollars
Software integration
How Any Connector Simplifies API Integrations for Your Business
Software integration
Empowering Your Employees with Automation- A Win-Win Strategy
Software integration
Building a Business Case for Automation in Your Organization
Employee scheduling
Automation in Hospitality - Streamlining Guest Experiences
Restaurant management
5 Ways Restaurants Can Leverage Automation for Operational Success
Sales forecasting
How to Double Your Restaurant's Profit in 30 Days
Inventory management
The Ultimate Guide to Accurate Inventory Counting in Restaurants
Restaurant management
How to Transform Your Restaurant Operations
Restaurant management
How to Effectively Reduce Expenses and Increase Staff Engagement in Your Restaurant
Food safety
7 Ways To Become A Food Safety Auditor
Employee scheduling
How to make sure you will always meet labor goals before you run payroll
Employee scheduling
How to reduce labor costs without retraining your management team.
Restaurant management
3 top reasons your managers should always earn their bonuses
Software integration
How to guarantee your franchise technology rollout will be a success
Employee scheduling
How to reduce labor costs by 3-5% without ever using an excel spreadsheet again
Employee scheduling
How to find and keep your best employees
Software integration
Why your IT team has to provide better mobile apps for you to stay competitive
Accounting payroll
How to streamline your business operations test for maximum efficiency
Software integration
How to make sure your technology projects are on time and on budget
Employee scheduling
Why employee engagement and retention are the keys to improving profitability
Employee scheduling
The easy way to write great employee schedules
Restaurant management
How to manage your restaurant inventory planning to ensure you're never caught short
Inventory management
5 Basic Inventory Management Tips That Can Save You Money
Inventory management
Top 3 Reasons Why You Need Cloud-Based Inventory Management Software
Restaurant management
The Best Food Service Management Companies in the Industry
Software integration
7 Tips for Choosing the Best Restaurant Directory Software
Food safety
What You Need to Know About Food Tech Safety
Employee scheduling
The Top 5 Reasons To Use HR Reporting Software
Food safety
A Guide On What To Know About SQF Food Safety
Inventory management
10 Inventory Management Stock Control Tips For Your Business
Restaurant management
Issues Facing Multi-Chain Restaurants In 2022
Employee scheduling
The Benefits of HR Software Reporting For Professionals
Employee scheduling
5 Top HR Software Solutions To Consider For Your Business
Software integration
5 Reasons Why You Need Restaurant Menu Software
Employee scheduling
Tips for Retaining Hourly Restaurant Employees
Employee scheduling
Hurdles That Keep Restaurant Chains From Becoming The Employer Of Choice
Accounting payroll
Why You Should Start Using Restaurant Payroll Software
Inventory management
How To Make The Most Out Of Your Simple Inventory Management Software
Restaurant management
Food Waste Management- 6 Strategies to Reduce the Impact of Food Waste
Food safety
CDC Food Safety- The Important Perspective
Food safety
What To Know About Taking A Food Safety Class
Inventory management
The Average Restaurant Food Cost Percentage & What You Can Do About It
Inventory management
Inventory Management Best Practices- A Guide to Controlling Your Inventory
Software integration
How to Choose the Right Restaurant Dashboard Software for Your Needs
Inventory management
5 Free Inventory Management Tools for Small Businesses
Food safety
How to Get a Food and Drink Handling License
Employee scheduling
3 Ways You Can Get Your Employees to Love Cloud-based HR and Payroll Software
Inventory management
5 Ways to Improve Your Multi Channel Inventory Management
Food safety
What To Know About A Food Safety Course Online
Employee scheduling
The Best Free Employee Scheduling Apps to Help Your Business Run Smoothly
Food safety
How To Identify PHF Food Safety Anywhere You Are
Restaurant management
5 Tips for Choosing the Best Kitchen Equipment Supplier
Software integration
Mobile Device Inventory Management- A Guide to Help You Do It Right
Food safety
Food Safety Zone- A Guide to Safely Eating Out
Restaurant management
3 Tips to Find the Best Restaurant Paper Suppliers
Inventory management
Top Free Inventory Management Software for Small Businesses
Employee scheduling
5 Reasons You Should Be Using Free HR Software
Inventory management
4 Types of Inventory Management Systems and How They Affect Your Business
Employee scheduling
HR Recruitment Software- Why Restaurant Chains Fail To Become Preferred Choice
Restaurant management
Food Waste Management Solutions- The Ultimate Guide to Eliminating Food Waste
Employee scheduling
HR Software Solutions- Tips For Retaining Hourly Restaurant Employees
Accounting payroll
What You Need to Know About Restaurant Payroll Laws
Employee scheduling
HR Software List- The Best and the Worst
Restaurant management
How Restaurant Food Suppliers Are Important To A Business
Restaurant management
What Are The Best Restaurant Paper Goods Suppliers?
Inventory management
The Ultimate Guide to Inventory Management Techniques
Food safety
Food Safety Tips- How To Stay Safe at Home
Restaurant management
5 Questions to Ask Yourself Before Hiring a Food Service Management Company
Restaurant management
Ordering Management System- Issues Faced by Multi-Chain Restaurants In 2022
Food safety
Three Steps to Creating a Food Safety Plan
Employee scheduling
The Best Employee Time Clock Machines for Your Business
Employee scheduling
The Top 5 Reasons to Switch to Cloud Based HR Software
Employee scheduling
Our Top 5 Best Employee Scheduling Apps For Small Businesses
Food safety
Food Safety News- A Checklist for Safe Foods
Restaurant management
8 Tips for Successful Financial Management In Food Service
Software integration
5 Tips for Improving Your Data Integration Software
Food safety
5 Benefits of Food Safety That You Need to Know
Employee scheduling
The Best Employee Shift Planning Manager | Employee Scheduling & Shift Planning
Employee scheduling
Free Employee Time Clock to Give Your Business a Competitive Edge
Restaurant management
The Best Restaurant Produce Suppliers in America
Employee scheduling
HR Timesheet Software- What To Look For and How It Works
Restaurant management
Find the Best Restaurant Chemical Suppliers
Employee scheduling
Tracking Time Effectively- The Best HR Time Tracking Software
Accounting payroll
5 Best Business Accounting Software Reviews
Employee scheduling
5 Free Employee Scheduling Apps You Need to Try
Inventory management
The Best Inventory Management Software- The Ultimate Guide
Restaurant management
How to Find the Best Restaurant Coffee Suppliers
Frequently Asked Questions
How can a restaurant lower prime cost?
Restaurants can lower prime cost by improving labor scheduling, controlling overtime, reducing waste, tightening inventory practices, updating menu pricing, improving portion control, and tracking the right metrics more often.
Can menu pricing affect prime cost?
Yes. Underpriced items, weak product mix, and low-margin menu items can all put pressure on prime cost, even when overall sales look healthy.
What metrics should owners track to control prime cost?
Restaurant owners should track prime cost percentage, labor cost percentage, food cost percentage, sales per labor hour, overtime, waste, remakes, comps, voids, and theoretical versus actual usage.
What is included in labor cost for prime cost?
Labor cost usually includes hourly wages, salaries, payroll taxes, benefits, overtime, and other employee-related payroll expenses tied to operating the restaurant.
