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Liquor costs and the Belief Gap
When we speak with bar owners and managers, we typically find that they have low costs
in the low-mid 20s which they are happy with. This is somewhat frustrating as an owner of
an inventory system, given the fact that having completed 60 orders of bars and restaurants,
we see the average level of inventory shrinkage is 18 percent.
So on the one hand, you have owners and managers that think their bar is performing as profitably
and effectively as they can. This is hidden by the fact that they are measuring their
performance by the liquor cost. When we dig into the performance in more detail and accurately
compare how many ounces of rum and porter of every product, we found a 20 percent inventory
shrinkage is the industry standard.
If you're still using liquor costs and have never gone to through the extra detail of
confirming how many ounces of rum and how many ounces of porter you bought, I strongly
recommend you to check out inventory systems available.