Break-Even Analysis for Restaurants in Ireland

Running a restaurant is as much about managing numbers as it is about serving great meals. In a year when 86% of Irish consumers say eating out is becoming too expensive to do regularly , knowing your break-even point isn’t just good financial practice — it’s a competitive edge. This guide walks through how to calculate your break-even point, interpret your figures, and make smarter decisions that boost your bottom line.

What Is the Break-even Point?

The break-even point is the moment when your total income exactly matches your combined fixed and variable expenses. In other words: it’s when you’ve covered your costs, and every additional euro becomes profit.

The Formula:

Break-even Point = Total Fixed Costs ÷ (Average Revenue Per Customer – Variable Cost Per Customer)

Or, using contribution margin:

Break-even Point = Total Fixed Costs ÷ Contribution Margin Ratio

Where:

Contribution Margin = Total Sales – Total Variable Costs

Contribution Margin Ratio = Contribution Margin ÷ Total Sales

Why Break-even Matters in Ireland’s Market

According to the Voice of the Restaurant Industry in Ireland report, 70% of Irish restaurants saw a decline in profitability in the previous year. With cost of living pressures on both operators and guests, being able to confidently forecast your break-even point allows you to:

• Set realistic sales targets

• Adjust menu pricing to reflect actual costs

• Plan expansion or renovations with less financial risk

• Reduce reliance on guesswork

Consumer Expectations and Pricing Sensitivity

Pricing has never been more under the spotlight. According to the Toast Consumer Preferences Survey 2025:

• 72.5% of Irish diners have changed their dining habits due to rising prices

• 48% say they’re very likely to avoid restaurants they perceive as overpriced

• 25.5% say understanding a restaurant’s break-even point would increase their trust in its pricing decisions

This highlights a growing opportunity: show guests that your prices are grounded in real costs, and you can win their trust and loyalty.

What Costs to Include in Your Break-even Calculation

Fixed Costs (paid no matter what)

• Rent or mortgage

• Business rates

• Insurance

• Equipment leasing

• Internet, phone lines, and software subscriptions

• Staff salaries (non-hourly roles)

Variable Costs (fluctuate with sales)

• Food and drink ingredients

• Hourly wages and tips

• Utilities like gas and electricity

• Packaging, disposables, and cleaning supplies

• Credit card processing fees

Mixed Costs

Some expenses (like electricity or water) fall somewhere in between. Treat these as fixed for your break-even analysis unless you track fluctuations closely.

Worked Example for an Irish Restaurant

Let’s say your monthly figures are:

• Fixed Costs: €66,000

• Variable Costs: €60,000

• Total Sales: €150,000

Contribution Margin = €150,000 - €60,000 = €90,000

Contribution Margin Ratio = €90,000 ÷ €150,000 = 0.6

Break-even Point = €66,000 ÷ 0.6 = €110,000

If the average customer spends €45, you’ll need about 2,445 customers per month (or ~82 per day) to break even.

How to Use This Insight

Knowing your break-even point is only useful if you act on it. Here’s how Irish operators are using this data:

• Adjust portion sizes strategically: With 40.5% of Irish diners saying they dislike size reductions more than price rises , opt for smaller increases with cost justification over stealth changes.

• Communicate transparently: 60% of consumers say they prefer restaurants that highlight cost transparency.

• Train your team: Use break-even analysis as part of new manager onboarding or pre-shift briefings.

Tools That Can Help

Operators like BANG restaurant in Dublin have boosted profits by 12.5% using Toast’s all-in-one POS platform to automate reporting, optimise operations, and spend more time focusing on service.

You can also:

• Automate recipe costing with smart tools

• Set real-time alerts when margins drop

• Track vendor pricing to avoid hidden losses

Final Thoughts

In Ireland’s rapidly changing dining landscape, break-even analysis gives you a clear view of what success really costs — and what it takes to reach it. With Irish consumers increasingly prioritising fair pricing, sustainability, and quality experiences, there’s real value in making your numbers work smarter for you.