6 Key Benchmarks Every Café Owner in Australia Should Know

01.10.25
Zest Coffee
Running a café is one of the most rewarding jobs in hospitality — but also one of the toughest. Between long hours, rising costs, and endless competition, it can be hard to know if your café is truly performing well.
That’s where benchmarkscome in.

 

Benchmarks are guideposts: they show whether your café is operating in a healthy range, and help you spot problems before they spiral. They aren’t hard rules — every café has its quirks — but they’re a proven way to keep your numbers on track.
At Zest Coffee, we’ve worked with some of Australia’s most successful cafés for over 15 years. Here are the key financial benchmarks for cafés in Australia, plus caveats where paying more can still make sense.

 

1. Coffee COGS (Cost of Goods Sold)

 

Target:20–25% of coffee sales
Your coffee costs include beans, milk and alt milks, sugar, cups, lids, and stirrers.
  • ✅ Healthy:20–25% of sales
  • ⚠️ Warning:Over 25% suggests wastage or underpricing
  • ✔ Exceptions:Higher coffee COGS can work if labour is low (e.g. grab-and-go cafés, pastries bought from a supplier, etc.)

 

Tips to improve:
  • Train staff to stretch milk efficiently and reduce wastage — over-pouring adds up fast.
  • Limit slow-moving alt milks that end up wasted.
  • Adjust espresso pricing: a $0.20 increase can add thousands per year in a busy café.

 

2. Food COGS

 

Target:25–35% of food sales
Food costs cover ingredients, baked goods, and packaging.
  • ✅ Healthy:20–30% (up to 35% for complex menus)
  • ⚠️ Warning:>35% often means menu bloat or portion creep
  • ✔ Exceptions:Higher food COGS can be fine if labour costs are lean (buy-in baked goods instead of cooking everything in-house)

 

Tips to improve:
  • Streamline your menu — fewer items = less waste.
  • Cost every dish properly (ingredients + packaging).
  • Review portion sizes before adjusting menu prices.

 

3. Staff Costs

 

Target:30–35% of sales
Labour is usually your biggest expense after rent. This includes baristas, kitchen, FOH, casuals, and super.
  • ✅ Healthy:30–35% of sales
  • ⚠️ Warning:40%+ can erode profit fast
  • ✔ Exceptions:Higher labour is fine if it drives revenue (e.g. premium service, high-end food)

 

Tips to improve:
  • Streamline workflow — seconds saved per drink add up daily.
  • Cross-train staff to avoid over-rostering.
  • Track wage % weekly, not monthly.

 

4. Rent

 

Target:10% of sales (max 15%)
Rent is fixed and hard to change — so it’s crucial to get it right from day one.
  • ✅ Healthy:8–12%
  • ⚠️ Warning:15%+ squeezes profits badly
  • ✔ Exceptions:Prime real estate can justify higher rent if foot traffic and sales volume are high

 

Tips to improve:
  • Negotiate annual increases before you sign.
  • Be realistic about projected sales per square metre.
  • Extend trading hours if your location supports it, to spread the rent cost.

 

5. Utilities & Overheads

 

Target:5–10% of sales
Overheads include electricity, gas, water, internet, insurance, cleaning, and software subscriptions.
  • ✅ Healthy:5–10%
  • ⚠️ Warning:12%+ = inefficiency or poor supplier deals
  • ✔ Exceptions:New cafés often run high until sales volume stabilises

 

Tips to improve:
  • Service equipment to prevent energy spikes.
  • Compare utility providers regularly.
  • Bundle insurance and telecoms to cut costs.

 

6. Net Profit Margin

 

Target:10–15% net profit
This is what’s left after everything is paid — your real measure of sustainability.
  • ✅ Healthy:10–15% net
  • ⚠️ Warning:0–5% = surviving, not thriving
  • ✔ Exceptions:Some months dip; focus on quarterly or annual trends

 

Tips to improve:
  • Adjust menu prices in line with supplier increases.
  • Focus on average spend per customer — small upsells add up.
  • Review COGS + wages weekly, not just at BAS time.

 

Why Balance Matters

 

No café hits every benchmark perfectly. The key is balance:
  • A grab-and-go café might run higher COGS but lower labour.
  • A full-service café may have high wages but also higher spend per head.
  • A premium location means higher rent — but also higher visibility and sales volume.
👉 Benchmarks are not about perfection — they’re about awareness and balance.

 

Next Steps for Café Owners

 

  • Compare your numbers against these benchmarks.
  • Spot the areas where you’re off.
  • Make one small change this week (review milk waste, renegotiate suppliers, trim menu items).
The best cafés aren’t perfect — they’re proactive.

 

Want More Tips for Running a Profitable Café?

 

At Zest Coffee, we’ve been helping cafés thrive for over 15 years. From coffee quality to financial health, we’re here to help you not just survive, but thrive.

 

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