Hospitality glossary · Money and margin
Gross profit percentage, or GP%, is the share of a sale left after the cost of the food or drink sold: sales minus cost of sales, divided by sales, times 100.
In practice
Definitions are easy. What matters is how the thing behaves in a real operation, and where it tends to go wrong.
A dish selling at £18 with £5.40 of ingredients in it runs at 70% GP. UK operators commonly target somewhere around 65-72% on food and 70-80% on drink, though the right figure depends entirely on the format. GP% measures product margin and nothing else — it is silent on labour, rent and utilities.
Chasing GP% with portion cuts. It moves the number on one month's P&L and shows up later as thinner covers and worse reviews, by which point the cause is hard to see in the figures.
Questions
Something here that doesn’t match what you’re seeing in your own business? That is usually worth a conversation rather than another article.
Gross profit percentage, or GP%, is the share of a sale left after the cost of the food or drink sold: sales minus cost of sales, divided by sales, times 100. A dish selling at £18 with £5.40 of ingredients in it runs at 70% GP. UK operators commonly target somewhere around 65-72% on food and 70-80% on drink, though the right figure depends entirely on the format. GP% measures product margin and nothing else — it is silent on labour, rent and utilities.
Chasing GP% with portion cuts. It moves the number on one month's P&L and shows up later as thinner covers and worse reviews, by which point the cause is hard to see in the figures.
WHY Hospitality