How Can Restaurants Use Data Intelligence To Scale Their Operations?

A bustling restaurant

Restaurant owners have a wealth of data, from employee records, distribution network logistics, self-service kiosks, and e-commerce figures to social networking reviews. Yet, according to BCG, only one out of every five restaurants fully utilize the vast amounts of data they have access to from various sources.

Modern POS systems, for instance, can show you metrics like the frequency of requests for extra ingredients. However, if all you do after reviewing this data is change the amount of stock on hand, you might be losing out on a sizable portion of sales.

That is where big data analysis is advantageous. Analyzing the metrics and reports related to your operations becomes essential to your role as the restaurant manager as the competition for customers grows more fierce.

What Is Restaurant Data Analytics?

Restaurant analytics refers to the process of assessing your restaurant’s data to gain meaningful data to enhance your restaurant’s overall performance. Analytics provide information beyond financial data and key performance indicators (KPIs), such as sales and profits. 

It also provides insight into why the restaurant operates as it is and suggestions for improving performance. It lets you dive deep into the figures to comprehend your business’s operations better.

Larger restaurants usually employ eight or more technology vendors, highlighting the need to invest in a trustworthy analytics solution. On the other hand, small and independent restaurants should not be concerned about big data if they don’t have multiple distributors on board. In short, they likely do not generate sufficient data. Therefore, it is preferable for them to focus on extracting value from the data their POS is already producing.

Having said that, restaurants of all sizes are producing more data than ever, making data analytics a fascinating field to research. According to Hospitality Technology’s 2023 POS Software Trends Report, restaurateurs are particularly interested in using analytical information for the following:

  • digital engagement, 
  • payment streamlining, and 
  • menu optimization, followed by the 
  • reward program, 
  • upselling, and 
  • personalized offers.

How Do Restaurants Gather Data?

You have various types of data streams at your disposal, not that you are required to use all of them. But as your business grows, having more than 2–3 becomes increasingly valuable. 

The average independent eatery should initially concentrate on the following three types of data:

General Operations

POS data, inventory control, CRM, or reservation systems are classic restaurant tools that one can use to gather general operations data. Some data can be gathered simply by monitoring how your restaurant operates daily. 

This allows you to analyze the specifics of every sale and optimize them at every stage. Data on operations also include your menu, staffing, and sales. 

Labor Data

The next thing to consider is your employee scheduling system. This is how you monitor and control your team, but it’s also how you can talk to them, set their paychecks, manage shift changes, and more. It eliminates the problem that paper schedules cause, where people don’t know what shifts they’ll be working every week. 

Instead, by using a scheduling system, you’ll also see how much work is scheduled at each hour of the day. It’s like having a digital timesheet for your business.

Customer Data

Customer data is all about your visitors — what they do, want, need, and who they are. You can market to the right customers, customize experiences and promotional offers, and improve the dining experience by adequately gathering and analyzing this data. Although, ensure you get their approval before using the data. 

For instance, ask your guests to join a mailing list or rewards program. Additionally, customer reviews can be a gold mine of insightful restaurant information.

The data types listed above are the common metrics of running a restaurant. Still, you may also have configurable data sources, such as customer traffic or Wi-Fi connections, that allow you to analyze trends. 

You could even use competitor data, such as pricing and customer feedback, to measure performance against others in your industry.

How To Use Data Intelligence To Scale Operations?

The world of data analytics is complex, and it can be even more intimidating for someone just starting to learn about collecting and analyzing restaurant data. To help with that, here are a few ways that restaurants can use data intelligence to scale their operations:

1. Labor Costs

Labor is a significant expense when running a restaurant, so keeping track of your labor cost in your total sales is essential. Your analytics solution should help you identify slower shifts, reducing labor costs because fewer employees are required during these periods. 

This data will also help you schedule more quickly and strategically based on your busiest days. You can figure out when your sales are the highest and how much you should spend on average for labor.

In addition, restaurant data analysis can be employed to optimize seasonal labor costs. For instance, the manager or owner can analyze past data for the holiday season. They can then use it to reduce redundancy by scheduling the appropriate combination of the temporary, permanent, and part-time workforce.

As a result, you can reduce your labor costs and keep your restaurant operating at maximum capacity all year round.

2. Menu Decisions

The menu is the restaurant’s heartbeat. However, regardless of how well you know your enterprise, it can be difficult to determine why a menu is or is not successful. With the assistance of restaurant analytics, you’ll be able to see beyond the surface and develop strategies for repeat business.

POS-collected data points can help provide a comprehensive view of customer appeal. You can get to the bottom of a menu’s success or failure by assembling information such as most ordered meals with repetitive orders and customer feedback

As a result, you will learn which dishes to replace, which ones to modify, when to apply special offers, and even how to organize your menu to highlight the most popular items.

3. Food Costs and Wastage

According to a report by RTS, restaurants in the United States spend $160 billion annually on wasted food. You have a tremendous opportunity to reduce overall food costs if you reduce waste.

These days, it is common for inventory tracking tools to have forecasting accuracy. This means they can analyze historical data to determine which items are most frequently and less frequently ordered. You can also analyze which ingredients are wasted and adjust your inventory requirements. 

However, because that software is not practical for all establishments, you can still use data to accomplish this manually to some extent.

Track what food is discarded weekly or monthly and what items are rarely ordered. Then, consider purchasing less of those ingredients. Or eliminate menu items for which ingredients are frequently wasted.

4. Dining Experience

Restaurant analytics can provide important insights about your customers and assist you in various ways. In the short term, POS and CRM information can help refine your definition of your target audience. 

In the long run, detailed insights can help you build better relationships with customers and foster loyalty.

Furthermore, analytics will give you access to specific individual tastes, allergies, and critical milestones, allowing you to meet their needs. And thus helping you improve customer experience. For example, you can give them a complimentary dessert on their anniversary. Or make recommendations based on their preferences when they place orders.

Furthermore, demographic data will allow you to create detailed customer profiles. With this information, you’ll be able to make more informed decisions about restaurant design, menu pricing, and inventory.


One of the keys to successful restaurant management is data. Many restaurants use customer experience surveys, point-of-sale systems, Google Analytics, and other data sources to assess performance. By keeping an eye on key metrics like overall sales, labor costs, reducing food waste, food quality, and prices, they enhance operations and mint even more money.

Along with this, a restaurant’s success depends on its ability to optimize its data and operations. A key aspect of that process is good management. Good restaurant management could also assist in identifying trends that may present a significant opportunity and in improving daily operations.

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Daniel McCarthy is a seasoned restaurant consultant and serves as the Communication Manager at Restroworks, a prominent F&B SaaS company. Drawing from his vast knowledge of leveraging innovative technological solutions, Daniel excels at enhancing restaurant operations and revenue, thereby contributing to the ongoing transformation of the industry.


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