" />Our Managing Director Matt was first introduced to Brighton’s The Green Door Store and Rossi Bar venues through his role as a profitability guru for the Music Venue’s Trust. After some initial conversations, it seemed highly likely that issues with suboptimal bar margins might be a significant driver of their financial underperformance.
Getting to the root of the problem
We started by putting in place the systems to calculate their bar margins accurately to get to the root cause of the issues. The team had previously been stock counting as opposed to stock taking – i.e. simply counting items to no end as opposed to capturing the data to study and analyse. Take a look at our blog post on this for more information on the distinction, and the benefits to stock taking which include seeing week on week losses and gains, understanding trends and highlighting high/low margin items.
Gathering meaningful data
We set about implementing a back-office system to allow the team to move to a stock taking model capable of providing valuable data to better understand profitability. After overseeing the bar in action, we uncovered a number of blind spots in the team’ stock tracking that would need to be be resolved to truly understand performance. There were till buttons that didn’t pair up with any stock items and cocktails with no stock ingredients attached to them despite being a focus of the menu. Woking with the in-house team we built cocktail recipes into the system so that every new order would accurately update each individual ingreident’s stock levels. We also uncovered other areas like band riders and staff tips drinks which also weren’t being reflected in stock, so we built processes to quickly rectify these moving forward. We trained the team to grow their understanding of the value of this data and the processes to follow to keep it accurate in future. Once in place, we collected 3 weeks’ worth of data to act as a baseline to better understand the business.
Business bettering insights
The insights were startling!
- At Rossi bar, 3 of the top 10 selling products had a GP of less than 60% including one very popular drink sitting at only 38%. Increasing prices on this trio was a quick win to implement with a sizable and immediate impact.
- An extended happy hour offer was driving strong 2 for 1 cocktail sales, but the high price of several key ingredients was hitting the margin hard. A shake up of the menu allowed a better balance of spirits to service both a high end pour and a more cost-effective option for promotions.
- A review of supplier pricing also showed some opportunities for improvement. We were able to arm the internal team with comparative pricing based on our sector experience, gearing them up to negotiate better deals.
- Additional support included training staff on upselling and minimising wastage to further enhance profitability, as well as quarterly ongoing margin reviews to continually assess and respond to market dynamics.
All together our work highlighted an additional £100,000 in profit to be captured with just basic changes to optimise the two venues’ bar margins.
