Labour cost as a percentage of net sales is one of the core numbers operators watch, alongside food and drink cost, and together they are often called prime cost. The right ratio depends on the format: fine dining with big brigades runs very differently from a counter-service cafe.
Cutting labour too hard shows up in slow service, burnt-out staff and falling sales, which raises the percentage anyway. Forecasting covers properly and building rotas around demand usually beats sending people home mid-shift.
What we ask on the show
- What's a healthy labour percentage for your format?
- Have you ever been cut early and lost a shift's pay?
- Is prime cost the only number that matters?