I am looking at doing a deli if the numbers can work. Can someone give me some figures about what the ideal labor and food costs should be? I have done the restaurant costing successfully before but the guidelines for this type of service may be different.

Thanks

Cookie

Keep the foodcost around 25% and the labor as low as possible. Labor is ther big profit killer.

I have a freind who is running 50% labor cost in his restaurant, theres nothing left at the end of the month to pay rent and utilities.
I recently bought a deli but turned it into a cafe, theres a lot more profit if you put the sliced meats between bread.

50%!?!

Yikes! That should be under 30%, for sure. Profit-killer is a huge understatement in this case.

thanks for the tips. so basically it is the same as a restuarant? right now i am at a national chain restaurant and we run around 23% for labor and 23% for food costs. if we hit 24.5 for either they scream. actually the concept will have a small cafe attached as well as a meat and fish market.

Its the same for any type business when explained in a pie chart, if you run out of slices , the last slice being profit, you lose.

I know a soup company which runs 12% labor, food cost is 20%.

Anyway, it sounds like a winner if you can manage the meat and fish without labor cost getting out of control.

Chains are able to get away with lower labor and food costs than non-chains. The independent brewpub I work for runs a labor cost of 29% (should be lower - too many @#!% FOH managers) and a food cost of around 27%.

actually when i did a brewpub in nevada city, ca. i ran a 16% labor and they still wanted it lower. food was around 26-28%

I guess the market determines labor cost, to a certain extent. Cooks here get $9-$10/hr, but they probably get less in other places. This place where I work has a GM and four other managers, in addition to the chef, all of whom get benefits. I imagine your place was not quite that top-heavy.

that labor was for hourly only. the kitchen started with a staff of almost 30 people. you are right though about not as much management staff.