ESTABLISHING SALES TARGET

Forecasting Food and Beverage Sales

⚫ Sales Projection or Sales Forecast – provides
figures regarding the number of covers, average
check, amount of revenue and profit that the food
business wants to generate.
⚫ Definition of related terms:
⚫ Cover – refers to servings consumed per customer.
Consumption of one dine-in customer is equivalent to
one cover.
⚫ Average Check- is the average amount of
consumption of one customer. It is computed as:
⚫ Average Check = Total Sales
Total Covers
Advantages of a Sales Forecast:
1. The sales forecast is an important tool for decision
making.
2. Sales forecast serves as a parameter for assessing
the
progress of business.
3. The forecast is a motivating tool.
⚫ It is the responsibility of top management to make
sales projection but it would be ideal to involve
department heads and supervisors in the goal
setting process so that they will identify with
agreed-upon targets and be committed in attaining
them.
 Mechanics of Sales Forecasting
A. For Existing Food Outlets
Procedure in Sales Forecasting:
1. Get a record of monthly revenue, covers and average
check for the past year.
2. Enter the projected increase in covers and average check
based on reliable assumptions.
3. Compute for the sales forecast using the formula:
Sales = Number of covers x Average Check

• Turn-over Rate is a ratio of the number of seats

occupied over the total seats available.
• A turn-over rate of 1.00 means all seats (100%) are taken
in one meal period.
 2019 FORECAST 2020
COVERS AVE. CHECK SALES
Month Turn- Actual Average Sales Percent Quantity Percent Amount
Over Check Increase Increase
Covers
Rate

Jan 0.3 2,790 P 160 P 446,400 10% 30%

Feb 0.5 4,200 190 798,000 50% 30%
March 0.5 4,650 185 860,250 40% 20%
April 0.5 4,500 180 810,000 30% 20%
May 0.3 2,790 170 474,300 30% 20%
June 0.3 2,700 165 445,500 10% 10%
July 0.3 2,790 160 446,400 10% 10%
Aug 0.3 2,883 167 481,461 20% 10%
Sep 0.5 4,500 175 787,500 20% 20%
Oct 0.6 5,580 178 993,240 30% 30%
Nov 0.8 7,200 180 1,296,000 40% 30%
Dec 0.9 8,370 190 1,590,300 50% 30%
TOTAL 52,953 P9,429,351
 2019 FORECAST 2020
COVERS AVE. CHECK SALES
Month Turn- Actual Average Percent Quantity Percent Amount
Sales Increase Increase
Over Covers Check
Rate

Jan 0.3 2,790 P 160 P 446,400 10% 3069 30% P 208 P 638,352
Feb 0.5 4,200 190 798,000 50% 6300 30% 247 1,556,100
March 0.5 4,650 185 860,250 40% 6510 20% 222 1,445,220
April 0.5 4,500 180 810,000 30% 5850 20% 216 1,263,600
May 0.3 2,790 170 474,300 30% 3627 20% 204 739,908
June 0.3 2,700 165 445,500 10% 2970 10% 182 540,540
July 0.3 2,790 160 446,400 10% 3069 10% 176 540,144
Aug 0.3 2,883 167 481,461 20% 3460 10% 184 636,640
Sep 0.5 4,500 175 787,500 20% 5400 20% 210 1,134,000
Oct 0.6 5,580 178 993,240 30% 7254 30% 231 1,675,674
Nov 0.8 7,200 180 1,296,000 40% 10080 30% 234 2,358,720
Dec 0.9 8,370 190 1,590,300 50% 12555 30% 247 3,101,085
TOTAL 52,953 P9,429,351 P 15,629,983
Mechanics of Sales Forecasting
⚫ B. New Food Outlets
⚫ If the food outlet is just about to begin its operations and
there are no sales records, one can make projections based
on an assumed number of diners (covers) per month
multiplied by the assumed average check.
⚫ The projected number of covers depends on the seating
capacity of the restaurant and the turn over rate.
⚫ A turn-over rate of 1.00 means all seats (100%) are taken in
one meal period. If all seats are occupied twice in one meal
period, the turn over rate is 2.00 (200%). For restaurants
with low patronage, the turn over rate can be as low as .30
or .50 which means only 30%-50% of the seats are
occupied in one meal period
Suggested Steps to Arrive at a Sales Forecast for
New Food Outlets
⚫ 1. Determine the maximum sales at full house
capacity, maximum turn over.
⚫ 1.1 Get data on seating capacity, expected rate of turn
over per meal period and average check (average cost
of consumption per cover).
⚫ 1.2 Get the total covers for all meals
⚫ 1.3 Get the average check (For new restaurants
without sales figures yet, one can roughly estimate the
average check based on the average price of dishes).
⚫ 1.4 To get the projected maximum sales, multiply
maximum covers by the average check.
 Assuming a restaurant serves breakfast, lunch and dinner, no snacks and the
maximum turn over and sales are estimated as follows:
Breakfast Lunch Dinner Total
DAILY SALES
Seating Capacity 100 100 100
Maximum Turnover 2 2 2

Daily Covers 200 200 200 600

Average Check P 150 P 175 P 175 P 166.66
Daily Sales P 30,000 P 35,000 P 35,000 P 100,000
MONTHLY SALES
Covers 600 covers x 30 days (for mos 18,000
w/30 days)
600 covers x 31 days 18,600
Average Check Sales = P 100,000/600 P166.66
Covers
Sales Monthly Sales= P100,000 x 30 days (for months P3,000,000
with 30 days)
= P100,000 x 31 days P3,100,000
 Projected Maximum Projected Average Sales
Turnove Covers (600
r Ratio
Covers Check (Covers x Average
covers/day X
no. of days in a Check)
month
Jan. .30 18,600 5,580 P 167 P 931,860
Feb. .70 16,800 11,760 167 1,963,920
March .50 18,600 9,300 167 1,553,100
April .40 18,000 7,200 167 1,202,400
May .40 18,600 7,440 167 1,242,480
June .30 18,000 5,400 167 901,800
July .30 18,600 5,580 167 931,860
Aug. .30 18,600 5,580 167 931,860
Sep. .50 18,000 9,000 167 1,503,000
Oct. .60 18,600 11,160 167 1,863,720
Nov. .70 18,000 12,600 167 2,104,200
Dec,. .90 18,600 16,740 167 2,795,580
TOTA 107,340 P 17,925,780
 Workshop Problem on Sales Forecasting
⚫ ABC Restaurant and Bar, a food outlet with 150
seating capacity, generated the following revenue
in the year 2019. Make a sales forecast, working
on the following assumptions:
⚫ Menus will be upgraded and the price will increase
by 5% for 2020.
⚫ With better products and improved services, the
Marketing Office expects the covers to increase by
10%.