Whomever told you that sold you a bucket of shit. I’ve worked in restaurants for almost 30 years. I’ve been a GM for 20 years of that time. Not one restaurant I have ever worked for had labor costs that were lower than 50% of the costs. Food costs are negligible. Labor, rent, and utilities are the biggest costs of running a restaurant, normally in that order, unless your rent is outrageous because of the location.
Italian and Chinese in Pittsburgh, Chinese and Pizza in Lex, KY, Greek restaurant in Minneapolis, Wendy’s and Taco Bell in Atlanta, Taco Bell and BK in Phoenix, and last place I worked in food was a pizza joint in San Diego. I’ve been around. The labor margins are almost always higher than anything else, rent is up there though. The wages are absolute shit, but they employ a lot of people, if you’re busy. Anyone of those restaurants had a full crew of 30-40 people working there.
Restaurant labor is max 30% of the costs. So in theory even doubling everyone’s wages in the restaurant should only create a 30% cost increase.
Nah
Whomever told you that sold you a bucket of shit. I’ve worked in restaurants for almost 30 years. I’ve been a GM for 20 years of that time. Not one restaurant I have ever worked for had labor costs that were lower than 50% of the costs. Food costs are negligible. Labor, rent, and utilities are the biggest costs of running a restaurant, normally in that order, unless your rent is outrageous because of the location.
You’ll have to be more specific about what types of restaurants and where. I got my info online.
I see numbers between 20-40% online.
Italian and Chinese in Pittsburgh, Chinese and Pizza in Lex, KY, Greek restaurant in Minneapolis, Wendy’s and Taco Bell in Atlanta, Taco Bell and BK in Phoenix, and last place I worked in food was a pizza joint in San Diego. I’ve been around. The labor margins are almost always higher than anything else, rent is up there though. The wages are absolute shit, but they employ a lot of people, if you’re busy. Anyone of those restaurants had a full crew of 30-40 people working there.
Fast food price points?
One might expect if labor is say, 36% of cost, it could still be the largest line item