Gross profit, or GP, is what's left after the cost of the ingredients, usually shown as a percentage of the net (ex-VAT) selling price. Many restaurants target food GP in the high sixties to seventies, with drinks higher, though the right number depends on the concept.
Menu engineering plots dishes by popularity and cash margin, sorting them into stars, plough-horses, puzzles and dogs, so you know what to push, reprice, rework or cut. The key insight is that cash margin pays the rent, not percentage alone, so a lower-GP steak can earn more per plate than a high-GP side.
What we ask on the show
- What's the most profitable dish you've ever sold?
- Do you push stars on the floor, or does nobody tell FOH the margins?
- How often should a menu be re-costed?