Restaurant Blog Sales analysis- an alternative approach

Strategic planning and efficient application is what makes restaurant a successful business venture. But in this
increasingly competitive world the process is not just limited to only planning and implementation. One has to perform a
thorough analysis of Sales which gives a detailed insight about trends in revenue. The question starts with, “how were
sales last month.. last quarter.. last year?” most analysts take the monthly, quarterly, or annual sales figures or compare
with budgets to identify the relative level of performance. The inference of this is that, period to period increase or
decrease in sale is important. But are they? Probably quite not that much, new studies suggest an alternative method of
comparison based on newly designed analysis approach. The method involves calculation of sales performance based on
various ratios.
In our study we have given an emphasis on “sales efficiency” and not just on measuring absolute or relative increase or
decrease in Year-on-Year data. Efficiently managed restaurants put an additional effort to optimize seating arrangement,
understand dreaded hours when the restaurant is less likely to generate an additional dollar, Avoid wasting materials
and efforts of the staff. Out of these we have analyzed the implication on revenue to seating arrangement & efficiency in
table management, taking real life data of a restaurant’s 2nd Quarter data of 2018.
SALES PER SEAT: This metric indicates the efficiency in management of restaurant space. Low revenue per seat with low
guest count, points out the fact that the restaurant is having problem to attract more customer while low revenue per
seat combined with high guest
Sales per Seat (for Apr- june quarter) count shows that average ticket
sales is sub-optimal. In our
7000.00 analysis, the sales per seat in 2nd
quarter of 2018 is highest in
6000.00
Location 1 ($5943.93), followed by
5000.00 Location 3 ($5754.23) and
4000.00
Location 2 ($4840.14). Location 1
Branch has fewer seats when
3000.00 compared to other two branches,
Sales per Seat (for
2000.00 Apr- june quarter)
but they are managing their space
more efficiently to generate more
1000.00
revenue per seat than the other
0.00 branches. Sales can be increased
Location 1 Location 2 Location 3 by changing the product mix,
better construction of menu,
utilization of social media, giving promotional offers to customers to encourage repeat sales.

SQUARE FEET PER SEAT: The square

Square feet per seat feet per seat measure efficiency of
44.00 table management of a restaurant.
This number is high for Location 2
43.00 branch (43.01 per sq. feet) than
42.00 Location 1 (39.67) and Location 3
(39.06). The restaurateur may think
41.00
that he will be able to fit 100 people,
40.00 but it may be against their fire code.
Square feet
39.00 per seat However, Location 2 is losing out an
approx. 10% of generatable revenue
38.00
because of inefficient seating
37.00 arrangement.
Location 1 Location 2 Location 3
 REVENUE PER SEAT HOUR (REVPASH) – PER DAY: Not every hour in a restaurant produces the same profit — high traffic
times such as lunch and dinner are more valuable than others. The RevPASH equation considers this factor when
calculating profits, which allows restaurateurs to better measure their establishment’s performance during both peak
and slow times. It is seen that the revenue per seat hour is highest on Fridays, Saturdays, and Sundays and the same is
low on Mondays and Tuesdays (as the week just begins, so normally people who ate out on weekends won’t want to eat
out again on Mondays & Tuesdays). To draw more people on Mondays & Tuesdays, various offers and promos can be
given to attract more sales. Prix fixe (or fixed price) menu option is a popular method to help increase efficiency for the
kitchen staff while enticing more patrons to try out the restaurant. During slower periods, focusing on adding a weekly
special to a menu, offering a happy hour or creating specials for seniors or children can bring more people through the
door and more profit to the restaurant during times when there’s generally a dip in profits.

RevPash -April
6.00

5.00

4.00

3.00

2.00 Location 1 RevPash

1.00 Location 2 RevPash

0.00 Location 3 RevPash

Wednesday

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4/1 4/2 4/3 4/4 4/5 4/6 4/7 4/8 4/9 4/10 4/11 4/12 4/13 4/14 4/15 4/16 4/17 4/18 4/19 4/20 4/21 4/22 4/23 4/24 4/25 4/26 4/27 4/28 4/29 4/30

RevPash -May
6.00

5.00

4.00

3.00

2.00 Location 1 RevPash

1.00 Location 2 RevPash

0.00 Location 3 RevPash

Wednesday

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5/1 5/2 5/3 5/4 5/5 5/6 5/7 5/8 5/9 5/10 5/11 5/12 5/13 5/14 5/15 5/16 5/17 5/18 5/19 5/20 5/21 5/22 5/23 5/24 5/25 5/26 5/27 5/28 5/29 5/30 5/31

RevPash -June
6.00

5.00

4.00

3.00

2.00 Location 1 RevPash

1.00 Location 2 RevPash

0.00 Location 3 RevPash

Wednesday

Wednesday

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6/1 6/2 6/3 6/4 6/5 6/6 6/7 6/8 6/9 6/10 6/11 6/12 6/13 6/14 6/15 6/16 6/17 6/18 6/19 6/20 6/21 6/22 6/23 6/24 6/25 6/26 6/27 6/28 6/29 6/30