Beverage Cost Control

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1.0 Introduction Alcohol sales (beverage sales) are an easy way to increase profitability because the costs are lower and the gross margin is far greater for beverage than for food. However, beverage costs must be controlled if an operation is to reach maximum potential of gross profit from beverage sales. Every reduction in beverage cost percentage renders a higher gross profit. Beverage costs that are above industry averages can negatively impact your profitability. A profitable restaurant typically generates a 22% to 28% beverage cost. Because of the impact beverage costs can make on an operation, it is important to know where beverage cost falls in relation to total sales on a daily or weekly basis. Beyond the bottom line, beverage…show more content…
A combination of several different controls is the best way to ensure tight control and therefore see the maximum potential liquor sales offer. 1. Par Stocked Bar * The bar should be stocked based on a number of bottles of each brand sold on the busiest day plus a margin for safety. * Bottles should only be restocked by managers and only on a bottle for bottle basis. 2. Receiving and Storing * Purchasing and receiving functions should be undertaken by separate individuals. The beverage buyer should not be the same person receiving the merchandise. A receiving report is generated by the purchasing manager stating the quantities, sizes, and agreed upon prices for the order. The receiver is responsible for inspecting the order when it comes in and making sure it matches the report. * All bottles received should be marked in a way that makes the bottle identifiable as a house bottle (to prevent bartenders from bringing in their own bottles and keeping the profits) * All received merchandise should then be stored in a locked area where access is limited to as few people as possible (ideally just one), as this allows shortages to be traced. 3. Maintenance * A perpetual inventory should be maintained for each time period with adjustments for purchases and requisitions. This perpetual inventory should be compared against a physical inventory at the close of every period and variances should be noted and investigated. 4.

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