Benchmarking
UK hospitality profit benchmarks: how does your business compare?
Most owners know their own numbers. Very few know whether those numbers are good. A food GP of 64% can feel perfectly healthy until you see comparable operators running at 70%. These are the working benchmarks we use when we first look at an independent restaurant, pub or hotel, and how to read your own figures against them.
The three numbers that matter first
Before anything else, we look at food gross profit, beverage gross profit and labour as a share of revenue. Together they usually explain most of the difference between a busy business and a profitable one.
- Food GP: a working benchmark of around 70%.
- Beverage GP: a working benchmark of around 74%.
- Labour: a working benchmark of around 28% of revenue, including employer costs.
Why these are a starting point, not a verdict
Benchmarks shift with your segment, location, price point and service style. A wet led pub, a fine dining restaurant and a rural hotel with rooms will each sit in a different place. A number below benchmark is a question to investigate, not proof that something is wrong.
That is why a fair comparison always uses businesses like yours. Comparing a city centre bistro with a country inn tells you very little.
How to check your own numbers
Use achieved figures, not menu costings. Take a full month of sales and purchases, adjust for opening and closing stock, and calculate GP separately for food and drink. For labour, include every hour paid, holiday, pension and employer National Insurance.
- Calculate food and beverage GP separately, never as one blended figure.
- Measure labour against net sales, by week, not just by month.
- Look at the trend over twelve months, not a single good or bad period.
What a gap is worth
Small percentages carry large sums. On a business turning over £1m, with £600,000 of food sales, every point of food GP is worth £6,000 a year. Labour two points above benchmark on the same turnover is £20,000. Our free Profit Calculator gives a quick estimate for your own figures.
From benchmark to action
A benchmark tells you where to look. It does not tell you why the gap exists or how to close it. That is the work of a proper review: purchase prices, recipe specs, menu mix, rota placement and pricing, checked against real data.
If you would like an outside view, our free Profit Discovery compares your top line numbers with comparable operators and shows where the biggest opportunities are likely to sit.
The takeaway
Know your food GP, beverage GP and labour percentage, compare them with businesses like yours, and treat every gap as a question worth answering.
