What is a Ratio of food sales to beverage and total sales?

The Ratio of Food Sales to Beverage and Total Sales reflects how much of the restaurant’s total sales are derived from food items as compared to beverage items. It is useful for understanding the product mix and analyzing the potential for growth in either food or beverage sales areas.

Calculating this ratio involves dividing the food sales revenue by the sum of food sales revenue and beverage sales revenue, and then multiplying the result by 100 to express the ratio as a percentage.

$$ Ratio \ of \ Food \ Sales \ to \ Beverage \ and \ Total \ Sales = \frac{ Food \ Sales \ Revenue }{ ( Food \ Sales \ Revenue + Beverage \ Sales \ Revenue )} * 100 $$

A high Ratio of Food Sales to Beverage and Total Sales indicates that food sales contribute more significantly to the restaurant's total revenue. This can be due to various reasons, such as the restaurant specializing in food, having a strong customer preference for food items, or offering limited beverage options.

On the other hand, a low ratio suggests that beverage sales play a more significant role. This may occur in establishments like bars, pubs, or coffee shops, where the focus is on serving drinks.

This ratio can also indicate opportunities for diversifying revenue sources or optimizing product offerings. By comparing this ratio over time or benchmarking it against industry averages, restaurants can gain insights into their sales performance and make data-driven decisions about menu planning, marketing, and revenue growth strategies.