Prime Cost
Cost of goods sold plus total labor cost — the two biggest controllable expenses in a restaurant, and the number most operators watch weekly.
Prime cost combines cost of goods sold (food and beverage cost) with total labor cost (wages, salaries, and payroll taxes) into one figure — the two largest expense categories a restaurant operator has direct, week-to-week control over, unlike rent or insurance.
Prime cost is usually tracked as a percentage of sales rather than a raw dollar figure, since it scales naturally with volume. A commonly cited healthy range sits around 55-60% of sales for full-service restaurants, though the right target varies by concept, service style, and local labor costs.
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