As has been well documented COVID-19 restrictions and regulations have profoundly changed pubs and hotels and their customer behaviours. Typically, over the course of a month we visit approximately 150 hospitality businesses and the measurable impact of these changes has been stark. Turnover is down (obviously), the mix of products being sold has shifted greatly, and changes in customers working habits and locations has led to a greater diversity in customer types visiting and their expectations.
Leaving aside the drop in turnover in businesses that are open and trading, we have seen a marked fall in the volume of spirits being consumed. Same as we would see in January and February customers are behaving defensively and consuming more Draught products; they are carefully watching their wallets and seeking out what they perceive to be better value in pints! Because of the requirement to purchase a meal when in a pub there is also a big shift in Wine sales with considerably more being sold. Pubs are seeing a lot more couples dining in – customers that would typically not have visited in the past – and this is driving the Wine sales, as well as a rise in Cocktails. All these changes, along with the favourable adjustment in the higher rate of VAT for 6 months, have led to movements in GP% and Cash Margin that are critical for owners and operators to understand, and capitalise upon.
However, we have also observed another trend in pubs and hotels due to COVID-19 restrictions; unauthorised and excessive staff drinking after hours. Bar staff at the end of trade would previously have alternative local late bars and night clubs open to them for socialising with fellow late-night workers but now with a very firm pre midnight closing time in place there are no after-hours destinations for late drinks. The upshot of this is that staff are staying late in your premises a substantial number of nights per week. They are consuming Pints, and they are consuming Spirits, particularly it seems top shelf premium beverages. We are seeing shortages across these categories, and more, at an extreme level in some places.
Consider seven people staying back late drinking without recording or paying for what they consume. Perhaps there are seven people on the premises two nights a week over a one month period, and each night those seven people consume 12 pints (4 people x 3 pints), 6 vodka and cokes (2 people x 3 drinks), and 3 gin and tonics (1 person x 3 drinks) – over a one month period under these conditions there has been a net stock loss of 1.1 kegs, 2.5 bottles of vodka, 2 cases of coke, 1.2 bottles of gin, and a case of tonic water. At retail pricing that’s a sales loss in excess of €1,200. Nobody can afford that now, or anytime.
Also, there is a level of house parties occurring where beverages are taken out of a premises and not recorded. There is a pattern emerging of over-generous measures being poured, be it inadvertently or to staff friends and families as a consequence of restricted time periods where customers are permitted on the premises. When we find delivery dockets missing it may often flag an attempt to cover up the missing beverages. There is also an issue occurring in many kitchens where we are seeing irregular and unjustifiable levels of stock purchasing – particularly higher value meats – and an absence of corresponding sales.
These examples are actual instances we have observed and reported upon in the last 8 weeks and they are commonplace across the industry right now. If you’re interested in total visibility of your Food and Beverage margins, total control of your inventory, and total security of your investment then talk to Total Stock Control today.
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