Prime Cost Benchmarks by Restaurant Type
| Restaurant Type | Food Cost | Labor Cost | Prime Cost Target |
|---|---|---|---|
| Full-Service Casual | 28–32% | 30–35% | Below 65% |
| Fine Dining | 30–38% | 33–40% | Below 70% |
| Fast Casual | 25–30% | 25–30% | Below 62% |
| Bar / Gastropub | 20–28% | 28–35% | Below 63% |
Which Lever to Pull First
If your prime cost is above benchmark, address food cost before labor. Supplier price comparison can improve food cost 3–5 points this week — without touching your team or your menu. Labor reductions are slower, more disruptive, and harder to reverse.
Improve Your Food Cost Side First
Upload your distributor price sheets and see where you are overpaying. A 3-point food cost improvement directly reduces your prime cost by 3 points.
Compare My Prices Free21-day free trial · Cancel anytime
Frequently Asked Questions
What is prime cost in a restaurant?
Prime cost is food and beverage cost (COGS) plus total labor cost combined. It is the most important profitability metric in restaurant operations because it represents the two largest controllable expenses. A healthy prime cost is 55–65% of revenue.
What is included in labor cost for prime cost calculation?
Total labor cost for prime cost includes all hourly wages (kitchen and front of house), manager salaries allocated to the location, payroll taxes (FICA, FUTA, SUTA), and any employee benefits. It does not include your owner draw unless you pay yourself a formal market-rate salary.
What is a good prime cost for a restaurant?
A prime cost below 60% is excellent. 60–65% is healthy. 65–70% is manageable but warrants attention. Above 70% means the business is likely not generating meaningful profit after occupancy and other operating expenses are covered.
How do I lower my prime cost?
Address food cost first — it is faster and less disruptive than labor cuts. Supplier price comparison, portion control, and waste reduction can improve food cost 3–5 points without any staffing changes. If food cost is already at benchmark and prime cost is still high, audit your labor scheduling by comparing scheduled hours against actual cover counts by daypart.