Illustrative case: cutting prime cost 6 points in 90 days
An illustrative case with composite figures: a restaurant with $60,000 in monthly sales, a 68% prime cost, and a 90-day plan to recover margin without destroying the experience.
In this article
Note: this is an illustrative case with composite figures. It does not describe a real client and does not promise results. It is here to show how the diagnosis, the levers, and the measurement connect.
The starting point
An independent full-service restaurant, $60,000 in monthly sales, and 42 employees between the dining room and the kitchen. The owner knew that “the numbers did not add up,” but he did not have a single figure to point to.
When he calculated prime cost:
| Item | Amount | % of sales |
|---|---|---|
| Sales | $60,000 | 100% |
| Food cost | $20,400 | 34% |
| Labor cost | $20,400 | 34% |
| Prime cost | $40,800 | 68% |
| Rent + fixed costs | $12,000 | 20% |
| Approximate EBITDA | $7,200 | 12% |
The target was 62%. The gap: $3,600 a month, $43,200 a year. It was not a problem of “raising sales”; it was a margin problem.
First two weeks: measure without changing anything
The temptation was to cut everything. Instead, the team measured:
- Food cost per dish for the 12 best sellers.
- Waste of proteins and vegetables over one week.
- Hours per shift and sales per hour.
- Prices from the five main suppliers.
- Discounts and comped meals.
They found three things:
- The protein portion was 12% larger than the recipe.
- Two suppliers had raised their prices without updating the plate costing.
- The night shift had the same staff as midday, even though it sold 40% less.
Weeks 3–6: portions and recipes
The kitchen team weighed portions over five services. It brought the protein back to the recipe and standardized garnishes. It did not change product quality; it changed consistency.
It also updated dish costs with real prices and found two dishes that sold well with a 38% food cost. One was reformulated; the other was removed.
Partial result: food cost from 34% to 32.4%. Savings: $960 a month.
Weeks 7–10: suppliers and purchasing
The owner requested quotes from three suppliers for the five main categories. He did not change everything: he compared yield, not just price per kilo. A supplier that is cheaper per kilo can be more expensive per serving if it has more waste.
He renegotiated two contracts and changed one. He also started buying some ingredients together with another restaurant nearby. Food cost dropped to 31.5%.
Cumulative savings: $1,500 a month.
Weeks 11–12: shifts
With sales per hour in hand, the team adjusted the night shift: fewer hours in the slow stretches, more support at the peak. No one was let go; schedules were reassigned and overtime was reduced.
Labor cost from 34% to 30.5%. Savings: $2,100 a month.
The result
| Item | Before | After | Difference |
|---|---|---|---|
| Food cost | 34.0% | 31.5% | −2.5 pts |
| Labor cost | 34.0% | 30.5% | −3.5 pts |
| Prime cost | 68.0% | 62.0% | −6.0 pts |
| Monthly savings | — | — | $3,600 |
| Annual savings | — | — | $43,200 |
EBITDA went from 12% to 18%, without raising prices and without changing the value proposition.
What did not work
- Trimming the protein and making up for it with more garnish: guests noticed and complaints went up.
- Buying from the cheapest supplier without measuring yield: food cost went down on paper and up in practice.
- Eliminating an entire shift: service broke down at the Friday peak and a large reservation was lost.
What did work
- Measure before you touch anything.
- Separate food and labor.
- Fix consistency first, not price.
- Compare suppliers by yield.
- Adjust shifts with data, not intuition.
- Measure the result every 30 days.
How to apply it to your restaurant
If your prime cost is out of range:
- Calculate your starting point with the prime cost calculator.
- Pick a single lever for the next 30 days.
- Define one metric and a review date.
- Do not change three things at once: you will not know what worked.
Frequently asked questions
Is this case real?
No. It is an illustrative case with composite figures meant to explain the method. We do not use client names or data without permission.
Can you lower prime cost without raising prices?
Yes, if there is room in portions, waste, suppliers, or shifts. If the problem is structural (rent, business model, volume), you may also need to review prices or format.
How long does it take?
It depends on the cause. Portion and supplier adjustments can show up in 30–60 days; shift and culture changes take longer. The important thing is to measure and not change everything at once.
