A busy restaurant, and a profit set by an operating decision
Wages, localisation and the menu: three operating decisions that shape a restaurant’s profit.
A counter can be crowded and the month-end account still losing, because a crowd alone doesn’t mean the restaurant is profitable.
We start from this question: where does the revenue go? Then we read a localisation requirement that concerns the team, and open the menu with a tool that diagnoses its items.
orders through delivery platforms in the second quarter of 2026, up 30.5% on the same quarter last year, with 44% of them from the Riyadh region.
A busy restaurant that isn’t profitable… where does the revenue go?
Wages are part of the answer: in the National Restaurant Association’s survey of US 2024 data, about a third of sales went to them, and more in the loss-making restaurants:
The figures are from the US market and do not represent the Saudi market, and we read them for comparison only, as we found no published Saudi survey in the same detail.
Restaurant Saudization starts from four workers per shift
Before you hire your team, know the rate that applies to your activity and location. In restaurants the rate applies when there are four or more workers per shift, and in cafés two or more:
The cleaner and the loading and unloading worker are excluded, provided together they do not exceed 20% of the shift’s workers, and the decisions do not cover hotel restaurants and cafés or cafeterias. The requirements rest on the 2021 decisions, so check their updated version.
The most ordered can be the least profitable
Menu engineering measures each item on two criteria: how often it is ordered, and how much profit it leaves after its ingredient cost, so it falls into one of four boxes:
An item counts as in demand if its share of orders is 70% or more of the average share of menu items. What sits under each box is a managerial reading, not an inevitable result.
A hypothetical example, for illustration only: an item that sells 120 times a week at a profit of 4 riyals a dish brings in 480 riyals, and another that sells 40 times at 15 riyals brings in 600. The first is more in demand, the second more profitable.
Picks from market news
Restaurants and cafés recorded 56.16 million point-of-sale transactions worth SAR 1.57 billion between 18 and 24 October, about a quarter of the Kingdom’s transactions.
Saudi Central Bank, via Al Eqtisad, 27 October 2026The Ministry of Municipalities and Housing updated requirements for ice cream shops, including temperature control, allergen disclosure, workers’ health certificates, and electronic payment.
Ministry of Municipalities and Housing, via Al Madina, 4 October 2026Start from the POS system
Pull from the point-of-sale system the number of each item sold in the last month, subtract its ingredient cost from its price, then place each item in its box. The boxes are a tool for diagnosing the menu, and the decision after that is yours.
Which cost surprised you after opening your restaurant or café?
Send your question to editorial@saudifoodtech.sa, and we may dedicate an upcoming issue to it. And if you run a restaurant or café and would like to tell your experience with these decisions, we’d be glad to feature it in an upcoming issue.
Sources
- Transport General Authority, via Al Eqtisadiah (9 September 2026), Al Madina (21 April 2026) and Al Yaum (11 January 2026).
- Ministry of Human Resources and Social Development, Saudisation decisions for restaurant and café activities (2 October 2021).
- National Restaurant Association, labour costs and restaurant profitability in 2024 (8 October 2025).
- LeBruto, Quain & Ashley, Menu Engineering: A Model Including Labor, FIU Hospitality Review (1995), on the Kasavana and Smith model.
- Saudi Central Bank, weekly point-of-sale statistics, via Al Eqtisad (27 October 2026).
- Ministry of Municipalities and Housing, ice cream shop requirements, and Al Madina report (4 October 2026).
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