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Thursday, December 26, 2013

Reader Question - Average Per Cover Calculation

Dear Sir,

Hope you are doing well, i need one clarification. When we calculate the Average Spend for the Food and Beverage, if the guest consumes Food and Beverage whether we take the cover only for food or both?

If we calculate the cover twice (both for food and beverage) it will be duplicate when we calculate the total F&B spend? or If we take for food only then the beverage average spend wont be correct?

Can you please check and let me know,what is the best practice followed in the Industry.

Thanks & Best Regards,


Thanks for the question, Harees.

The revenue per guest, commonly referred to as the average revenue per cover, includes both food and beverage.  It is perfectly acceptable to report the average food revenue per cover, the average beverage per cover and the average revenue per cover.
  In fact, I prefer the components to be reported along with the total revenue. 

We can see the method more clearly with an example.  A restaurant has total sales of $2,000,000 comprised of $1,400,000 of food sales and $600,000 of beverage sales.  They served 100,000 guests.

Our average food sales per cover is $14.00 and our average beverage sales per cover is $6.00.  The Average Spend per Cover is $20.00.

We use the same denominator in all 3 calculations.

The reason we use the same denominator is we always have the same number of covers.
  A guest could spend nothing on beverages and still be included in our cover count.

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