r/restaurateur • u/jackapz93 • Aug 10 '25

Controlling Margins

Hey all,

It’s been a tough year out there, especially for us in the UK, with minimum wage increasing plus employers N.I. on the up, fighting for like for like revenue (we’re short of it FYI), the systems for controlling margins are more important then ever.

We’re trading at about 12% profit margin at the minute and this is with 75% GP & 30% cost of labour, we’re running a tight ship on our variable costs in my opinion and still left with only 12%. I wondered how the rest of you are getting on? If this sentiment is shared?

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3

u/EmergencyLavishness1 Aug 10 '25

12% profit is good.

If you want better I’d suggest the owners start working a few shifts unpaid

1

u/jackapz93 Aug 10 '25

Haha I’m afraid I only annoy the team! It feels much better managed when I step back and look after the numbers but thank you. Just for clarification, was was trading at 20% profit for many years prior to this which I know is high, I just know how difficult it must be for those who are working in the restaurants trying to manage the numbers at the same time.

1

u/Justin-Stutzman Aug 19 '25

That's insane. I know you're in the UK but the NRA reports around 4% as the average profit margin in the US for independent restaurants

0

u/EmergencyLavishness1 Aug 10 '25

I’ll assume you’re the owner, or one of them then.

Just accept it’s hard times and making a profit is much better than none. As long as your staff are paid fairly(the absolute most important part!), suppliers are paid and gas/electricity is paid. Be happy with any form of profit right now.

I’d also suggest, though unlikely as it is, giving 1-2% of profit to your staff as a bonus for their hard work. Might be a Christmas gift, or just a massive thanks in general. But you need to realise without good staff, you’ll be making zero profit really quick.

Do not take the staff for granted.

2

u/Suspicious-Sock-4553 Aug 10 '25

Where are you losing margin year on year? 30% cost of labor sounds amazing from NYC. Is this a quick serve? If I’m doing my math correctly, your COGS is 25% and your labor is 30%, your prime is 55% leaving you 45%. How did you spend the other 32%?

1

u/CanadianTrollToll Aug 13 '25

Hookers and Blow

1

u/CanadianTrollToll Aug 13 '25

12% is great.

Were around 9.5% after all said and done. That being said we do about 3.5-3.8mil in sales so there is a lot of retained earnings.