Reading Outlet Performance based on Sales, Margin, and Peak Hours

The outlet with the highest turnover isn't necessarily the healthiest. The numbers may seem appealing, but take a closer look. What are the margins? How many transactions are taking place?

Are sales high due to big discounts? And is the outlet truly productive throughout the day? Questions like this make restaurant outlet performance analysis it is not enough to just look at total sales.

Owners need to read several indicators simultaneously to be able to understand business conditions more fully. Imagine you have three outlets. The first outlet generates the highest revenue, but its food costs are high.

The second outlet had lower sales but much healthier margins. The third outlet was quiet most of the day, but always packed at lunchtime. If you look solely at revenue, the first outlet appears to be the winner. However, when you consider sales, margins, and peak hours, the story can change.

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Why Isn't Sales Enough to Assess Outlet Performance?

Sales or turnover is one of the first numbers owners usually look at. It's easy to understand. When sales increase, the business appears to be growing.

The problem is, turnover doesn't show how much money is actually left over after product costs and other activities are taken into account.

An outlet with monthly sales of IDR 500 million could generate lower margins than an outlet with sales of IDR 350 million. This could be due to high food costs, overly aggressive discounting, waste, or an unprofitable menu composition.

Because of that, restaurant outlet performance analysts need to look at the relationship between numbers, not just look for the outlet with the biggest sales.The question is, are these sales generating healthy margins? Is customer traffic strong enough? And is the outlet's capacity being utilized effectively?

Three Main Dimensions: Revenue, Margin, and Traffic

The first dimension is revenue or sales revenue. This figure indicates how many transactions an outlet successfully generated in a given period.

However, revenue only tells us how much a business is selling. We also need to look at margin, which is how much contribution remains after product-related costs are accounted for. Margin helps indicate the quality of sales.

The third dimension is traffic dan time pattern. Simply put, how many transactions occur and when they are most active.

Two outlets can have the same turnover, but their business models differ. Outlet A receives transactions evenly from morning to night. Outlet B is only busy for two hours during lunch.

This distinction is important because kitchen capacity, number of staff, tables, and operating hours need to be adjusted to suit this pattern.

Supporting Metrics to Read

So that the three dimensions can be analyzed more sharply, there are several supporting metrics that should also be taken into account. AOV atau Average Order Valueis the average value of each transaction.

AOV helps to see whether customers typically make small or large value purchases. Transaction count is the number of transactions in a certain period.

This figure helps distinguish whether high turnover comes from many customers or just a few large-value transactions. COGS atau food costare costs related to materials to produce products sold.

This figure helps to see how much product costs affect margins. Discount is the value of a discount offered to customers. Discounts can increase sales volume, but if they're too large, margins can be squeezed.

Meanwhile, waste is materials or products that are wasted and ultimately result in no sales. High waste can signal problems in purchasing, storage, preparation, or forecasting.

How to Compare Outlets of Different Sizes

Sumber: Istockphoto

Comparing outlets can't just be done based on nominal value. An outlet open 15 hours a day certainly has more transaction opportunities than one open only 8 hours.

Likewise, an outlet with a capacity of 100 seats will have different conditions than an outlet with a capacity of 30 seats.that, use a fairer measure.

You can see sales per transaction, namely total sales divided by the number of transactions.To assess efficiency, the margin per transaction can also be used. This way, outlets of different sizes can still be compared based on their productivity.

For example, outlet A has a turnover of Rp600 million and 20,000 transactions. Outlet B generates Rp450 million from 10,000 transactions. While A's sales are indeed higher, B's average transaction value may be higher.

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Example of Three Outlets and How to Read Them

To make it more concrete, try looking at the following simple simulation.

• Outlet A
  • Revenue/month: Rp600 million
  • Margin: 18%
  • Transactions: 20,000
  • Characteristics: high sales, low margin
• Outlet B
  • Revenue/month: Rp450 million
  • Margin: 30%
  • Transactions: 12,000
  • Characteristics: moderate sales, high margin
• Outlet C
  • Revenue/month: Rp300 million
  • Margin: 25%
  • Transactions: 8,000
  • Characteristics: low sales, strong peak hours

Outlet A appears most attractive if you look at revenue alone. However, the 18% margin indicates there's room for further investigation. It could be high food costs, excessive discounts, or a higher proportion of menu items selling low-margin items.

Outlet B, on the other hand, has a different story. Its turnover is smaller, but its 30% margin makes its sales appear healthier. This outlet likely has a more efficient menu combination, pricing, and costs.

Meanwhile, Outlet C had the lowest turnover, but strong peak hours. This means the problem isn't necessarily the product. Growth opportunities may lie in off-peak hours.

From this example, the best outlet cannot be determined from just one column. Here's why restaurant outlet performance analysis need to read sales, margins, transactions, and time patterns simultaneously.

How to Read Peak Hours and Operating Capacity

Sumber: Istockphoto

Peak hours are often considered simple information. However, time patterns can provide significant operational insights. For example, an outlet has 45% of its daily transactions only in the 12.00-14.00 hour range.

This means that these two hours require greater attention from the staff, kitchen preparation, stock, and service capacity.If there are too few staff, queues can be long.

Conversely, outlets with short but consistent peak hours can find ways to maximize those periods. The quickest-to-produce menu items can be prioritized. Preparation can begin earlier, and staffing can also be adjusted.This pattern also helps the owner find anomalies.

For example, lunch sales are typically very high, but suddenly drop for a few days. This decline needs to be considered in conjunction with other factors.Is there a stock issue? Has there been a change in operating hours? Has a new competitor emerged? Or is there a service issue?

FAQ

1. Is the outlet with the highest turnover always the best outlet?

No. High turnover can be accompanied by low margins, high food costs, or significant discounts. Therefore, turnover should be read in conjunction with margins and transaction volume.

2. What are the most important metrics for comparing outlets?

No single metric is always the most important. Revenue, margin, transaction count, AOV, food cost, discounts, and waste all need to be viewed within the business context.

3. Why are peak hours important in reading outlet performance?

Because peak hours indicate when an outlet's capacity is at its highest, this information can help manage staffing, preparation, inventory, and service.

4. Are outlets with low sales necessarily in trouble?

Not necessarily. Outlets with lower sales could have healthy margins or very strong peak hours. The cause and context must be considered first.

Conclusion

Eventually, restaurant outlet performance analysis this becomes increasingly difficult as the number of branches increases. Owners must compare multiple locations with varying characteristics.

If data is still scattered across separate spreadsheets and reports, the process can become manual. Owners look at revenue individually and then calculate margins.

After that, compare transactions and peak hours. Only then try to find anomalies.In fact, business decisions shouldn't have to wait for such a long process.

A cross-outlet dashboard can help bring together various indicators in one view. With connected data, restaurant outlet performance analysis can also be directed to find anomalies more quickly.

For more integrated data management and business operational needs, you can consider OLIN by ESB. So, when you open your next sales report, don't stop at the highest number.

Try to look at three things at once, namely how much was sold, what was left, and when the customer came. From these three figures, the true flow of outlet performance begins to emerge.