How to grow your food business with Restaurant Data Analytics

restaurant menu analytics

The restaurant industry is one of the most competitive, with new business budding each year just to close after a few months. For a sector with such high failure rates (about 80% of restaurants close within five years or less), amazingly, owners don’t think about ways to mitigate risks. One way of doing this is getting inspiration from the financial world, where every dime is counted and decisions are made based on numbers, not hunches. We suggest using restaurant data analytics to grow your food business.

A report by IBISWorld showed that on the US market, the profit margin for restaurants is only about 6.6%, which means that even the slightest change in costs or wages could have a devastating effect on the sustainability of your business. This is enough reason to take data analytics for restaurants seriously and look for tools to help your business not only survive, but thrive.

Answer these fundamental questions with the help of restaurant data analytics

When designing their strategy for business growth, restaurateurs have to answer some critical questions related to costs, profitability, menu engineering, and services. Gut feeling and vast experience in the field help, but are not bullet-proof, especially in the fast-changing world of the restaurant business. Below, we go through a few of the cornerstone questions for which data dashboards could hold the key.

It is all about the sales funnel. First, you need to know how many people have heard about you. Secondly, how many of these are interested(that means they visit your website or location). Next, what do they do once they are in contact: place orders or leave? Last but not least, do they come back? By connecting your website and POS to the GloriaFood system, all your restaurant data analytics are in one place and ready to answer these questions with a single click.

1. What is your best-selling/ worst-selling item?

Every business needs to critically evaluate its products or services at least every trimester to decide if these make sense or they need new ones. As a restaurant, you need to do this more often. A first evaluation is done after you have launched a new menu, then after the list has been in use for some time, and before changing the menu. Savvy restaurant owners who rely on business intelligence systems for restaurants can do this in real-time, at any given moment, using restaurant menu analytics. They don’t need to wait until the end of the week or the month.

Look in your dashboard and order the list of sold items by the volumes ordered. You can rule out everyday things like drinks (water, coffee) and bread, and focus on the dishes. The first 3-5 are your workhorses. Don’t even think about changing these or touching them.

Next, move to the bottom of the list and see which are your least asked for plates. Try and find causes for this, and the next time someone orders one, ask them what they liked and didn’t like. Compare your real-life orders with the menu and see if there are dishes that are rarely or never ordered. Think about replacing these, since menu real-estate is expensive.

2. What are the best days for discounts and promotions?

In any industry, there are slower periods, and that is normal. Entrepreneurs who have to pay rent, wages, and suppliers know that they have to do something about that. Some money is better than no money at all. Depending on the type of restaurant you have, the location, and the menu type, you will experience different low-business times. Restaurants in corporate buildings have weekend slumps, while high-end sites might have blue Mondays after a full weekend.

how to analyze restaurant data to sell more

Don’t just trust your gut, look into restaurant analytics metrics and find out your busiest days, as well as the low-traffic ones. Create a staff schedule that ensures fast service during rush hours and try to think about suitable promotions and events for slower times.

Once you have the numbers, you can even use them to brag about how many people you can serve or how fast you can bring out the steak.

3. Who are your top servers?

Your restaurant is only as good as your staff. People really make the difference and you should know who are your top players. Creating an internal competition through gamification can make your employees more interested in their work and more dedicated.

You should look at how many orders each member of the serving staff is taking, as well as checking the value of their orders. Compare those orders and see if they managed to upsell something or cross-sell drinks and extras.

4. How should you schedule your staff?

The previous two analyses can also help you solve one of the fundamental problems of restaurant management: staff scheduling. You want to have your best people on busy days, working together with low-performers or new employees. The underperformers could learn from the stars or at least get motivated. The volume of orders and the number of clients also show you how many serving-staff members you need, as well as how many people are needed on the kitchen floor. This way, you can avoid customer complaints about slow orders.

5. How can you sell more by adding drinks?

Cross-selling is sometimes the best way to increase your revenue because drinks have a much higher profit margin than food. By looking at the combination between the dishes and drinks ordered, you can see patterns and know what to recommend. Maybe a specific bottle of wine is trendy, or your clients prefer to have coffee with most desserts.

Once you have performed the restaurant data collection in the dashboard, instruct your personnel to recommend those combinations or even include them in the printed menu as specials.

6. What is your most profitable location if you have a multi-location chain?

Learn from large food chains like McDonalds and KFC. They wouldn’t even think about running their business without reliable data reporting. Think and act corporate, relying on active KPI management instead of winging it.

If you have multiple locations, it’s always necessary to compare how they perform against each other. This tells you valuable info about the place, the management’s skills, and the team you have in each restaurant. It is also a way to make a rational decision in case you need to close down at least one of them.

sample of Gloriafood dashboard for restaurant data analytics

7. What are clients saying about your restaurant?

This feature is not built into most restaurant data analytics solutions; it could be an add-on or a separate software program altogether. Current advancements in language processing can identify the tone and sentiment of your clients in the reviews they leave online.

You need this type of qualitative reports for your business to make sense of the numbers you see in the quantitative data such as sales and client reports. The reviews could teach you that food comes too slow, or that it usually has too much salt. These are the types of insights you could never guess just by looking at the sales.

8. What should be the stock volume for each ingredient?

Having a clear understanding of what you sell and when you sell it can help you create the right stocks of ingredients. Be sure that you never run out and have to tell customers that a specific dish is unavailable. Since working with food means dealing with highly perishable materials, you need to keep a close eye on everything you use, as well as what you throw away.

You can reduce food waste by knowing how to analyze restaurant data. Compare the inventory levels with sales and see which ingredients are not used fast enough. By throwing away less, you also get to optimize your profit margin since you are literally not throwing money out to the garbage anymore.

To get some inspiration, think about what Southwest Airlines did in 1994 when they looked at the numbers and took out the olive from the salads they served onboard since most clients wouldn’t eat it. This small change saved them $40,000 in one year. The same company removed the logo from the garbage bags and saved an additional $300,000 per year. Even small changes can lead to substantial savings, by the power of multiplication.

9. Can you forecast sales?

Restaurants that strive to forecast sales face several challenges, including seasonality, economic context, and their own success. An online ordering system with restaurant analytics can help managers create more accurate estimates because you already have the average sales, the minimal and maximal volumes so far and, in time, the same transactions for previous years to fight seasonality.

These numbers have to be adjusted according to your growth, which you can also get from your sales reports.

We are aware that working with numbers can be intimidating, but friendly restaurant management systems like GloriaFood make this easy for all restaurateurs. It is as simple as checking your social media platforms, just that instead of likes, you look at revenue.

Using restaurant data analytics, you can improve your competitive edge, increase your profitability, raise your profit margin, and develop your customer base.

So create an account with GloriaFood and use all of the restaurant data analytics in your restaurant admin panel to grow your business.

Silvia Palașcă

Silvia Palașcă is a passionate writer covering mostly the wine, food and travel industries, and a talented web developer with extensive knowledge of website optimization and SEO.

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