Profit Measurement of Menu Items: In Hong Kong's Chinese Restaurants

Abstract

The long-time calculation for gross profit of a menu item is selling price less food cost, but such other inputs as labor and energy are not negligible. Moreover, not only are labor and energy usually not included in the calculation, but food costs are often not updated frequently as menu items and recipes change, owing to the complexity of making the update. A survey of operators of Chinese restaurants in Hong Kong (freestanding chain restaurants, as well as restaurants in hotels and clubs) found that the respondents support the idea of updating menu costs and considering labor and energy expenses. However, the difficulties of measuring the inputs, including numerous uninventoried food items typical of Chinese cooking, undermine a more precise profit calculation of menu items in Chinese restaurants in Hong Kong. © 1998, Sage Publications. All rights reserved.