What is the average restaurant profit margin in Australia?
Almost two in five Australian venues, 38.4%, made 2% or less. Nearly one in five lost money outright. Only 11.1% cleared 10%. Those are the reported figures from the 2025 industry benchmarking survey, and they explain why so many full rooms leave their owners broke.
What venues actually took home
The Restaurant & Catering Industry Association of Australia surveys its members each year. This is the net profit distribution from its 2025 report, published March 2026.
| Net profit margin | Share of venues |
|---|---|
| Made a loss | 19.2% |
| Broke even | 6.1% |
| 0% to 2% | 13.1% |
| 2% to 5% | 18.2% |
| 5% to 10% | 32.3% |
| 10% and above | 11.1% |
The bands sum to 100, so you can read your own position straight off it. If you are making 4%, you are in the middle. If you are making 11%, you are in the top tenth of the industry.
Nearly half of operators, 49%, also reported that their profitability had declined over the previous three years.
Why the average is so low
Because the two biggest cost lines are enormous and they move without asking.
| Cost line | Share of turnover |
|---|---|
| Wages, salaries and superannuation | 40.25% |
| Food cost | 38% |
| Beverage cost | 26% |
Wages and food together average about 78% of turnover. Rent, power, insurance, compliance, repairs and finance all come out of what is left. There is not much room in that sentence, which is exactly the point.
What healthy looks like
| Line item | Target |
|---|---|
| Coffee cost of goods | 20% to 25% of coffee sales |
| Food cost of goods | 25% to 35% of food sales |
| Staff costs | 30% to 35% of sales |
| Rent | 10% of sales, 15% maximum |
| Utilities and overheads | 5% to 10% of sales |
| Net profit | 10% to 15% |
Ten to fifteen per cent net is the widely used target. Set against the distribution above, hitting 10% puts you in the top 11.1% of Australian venues. That is a real target, not a common outcome, and it is worth being honest about the difference.
On a $1 million room, the gap between 2% and 12% is $100,000 a year. That is not a marketing problem. Nothing about a busier Saturday closes it.
How to compare yourself in ten minutes
- Take your last full year. Work out cost of goods, labour and rent as a percentage of turnover.
- Put each one next to the reported average and the target above.
- Whichever is furthest from target is where your money is going. Start there.
- Then find your own net margin and place yourself on the distribution table.
If all three ratios look fine and you still feel broke, the problem is volume, rent, or the fact that the business is paying everyone except you. That last one is more common than anyone admits.
What I learned running one
I ran Great Aunty Three in Enmore for eleven years. The press was good. The room was full. Team paid, suppliers paid, rent paid, me last. Longer hours every year for less. I finished with less than I started with.
I had not built a business. I had bought myself a job, and it took me eleven years to work that out. The numbers were on the page the whole time. Nobody had shown me which three to read.
Related guides
- Why is my restaurant busy but not profitable?
- What should food cost percentage be?
- What percentage of sales should wages be?
Sources. Reported industry figures are from the Restaurant & Catering Industry Association of Australia, 2025 Industry Benchmarking Report, published March 2026. Target ranges are from Zest Specialty Coffee Roasters, six key benchmarks every Australian cafe owner should know. Worked examples are arithmetic you can check yourself. Everything else is a first-person account of eleven years running one venue in Enmore, Sydney.
Venues measure cost of goods differently, so treat every published average as a signal to check your own numbers against, not a rule.
I ran Great Aunty Three in Enmore for eleven years. I know which of these numbers eat an owner alive, because they ate me.
If the room is full and the money is not, the leaks are the problem. That is what the Full Plate Method does, one client at a time, by application. If the venue runs fine and the room is the problem, that is Forkcast, my marketing studio for Sydney restaurants and cafes.