Per Person Average / Per Ticket Average

Definition:

PPA (Per Person Average) and PTA (Per Ticket Average) are key performance metrics used in the restaurant industry to measure the average amount spent by customers during a visit or per transaction.

• PPA calculates the average revenue generated per individual customer, which is particularly useful in full-service restaurants where customers may order multiple items or share meals.
• PTA focuses on the average revenue per ticket or transaction, which is more relevant in quick-service or fast-casual settings where orders may include multiple people but are processed as one transaction.

Both metrics help operators understand spending behavior, optimize pricing strategies, and assess sales performance.

Why It Matters:

• Revenue Insight:

  Tracking PPA and PTA provides essential insights into customer spending patterns. By understanding how much customers are spending on average, restaurant operators can identify trends, assess menu performance, and optimize pricing.

• Operational Efficiency:

  PPA/PTA metrics allow restaurants to monitor their revenue per customer or transaction, enabling them to focus on increasing profitability without necessarily increasing customer traffic. Therefore, this is particularly useful for optimizing staff labor and managing inventory.

• Menu Development:

  Understanding these helps guide menu development and promotional strategies. If Per Person Average is lower than expected, introducing high-margin items or creating bundle deals can help increase the amount customers spend per visit.

• Business Growth:

  Focusing on increasing PPA and PTA can significantly boost overall revenue. By encouraging higher spend per customer or per transaction through upselling, menu engineering, and offering value-added items, restaurants can grow their profitability without needing to heavily invest in attracting new customers.

Characteristics of PPA/PTA:

• PPA (Per Person Average):

  PPA is commonly used in full-service and fine dining restaurants where individual spending can be influenced by menu variety, beverage offerings, and service style. Operators calculate PPA by dividing total revenue by the number of customers served.

• PTA (Per Ticket Average):

  PTA is useful in fast-casual and quick-service restaurants where multiple customers might place a single order. Thus, this metric helps operators understand how much revenue is generated per transaction. PTA is calculated by dividing total revenue by the number of tickets or orders processed.

• Influence of Menu Pricing:

  Menu pricing plays a significant role in PPA/PTA. Offering premium items, combos, or high-margin add-ons can drive up the average ticket or customer spend. Operators often adjust pricing strategies based on insights from these metrics.

• Impact of Upselling:

  Effective upselling, such as offering appetizers, desserts, or drinks, can increase both PPA and PTA by encouraging customers to purchase more per visit.

Example in Action:

A casual dining restaurant tracks its PPA to monitor customer spending patterns.

They notice that their PPA is lower than the industry average.

To address this, they introduce a premium menu with higher-priced entrees and launch a training program for their staff to upsell beverages and desserts. Over the next quarter, the restaurant sees a 10% increase in PPA, contributing to higher overall revenue without increasing the number of diners.

Additional Resources & Related Terms

• Average Check:
  The average check, also known as the average ticket or average spend per customer, is a key performance metric in the restaurant industry.
• Upselling:A strategy used by staff to encourage customers to purchase higher-priced items or add-ons, increasing PPA/PTA.
• PPA/PTA  Growth:
  The increase in the average amount a customer spends at a restaurant or food service establishment over a certain period.

Conclusion:

PPA and PTA are fundamental metrics for understanding customer spending habits and driving revenue growth in the restaurant industry.

By tracking and optimizing these metrics, operators can better manage pricing strategies, enhance upselling techniques, and improve overall profitability.

Whether it’s increasing the average spend per customer or per transaction, focusing on PPA/PTA can significantly impact a restaurant’s bottom line and long-term success.