Measuring Your Pub’s Performance

Gaining Insight into Sales

You likely review your KPI’s, such as gross profit/food costs, labour costs and net profit on a regular basis. These give you an excellent idea of how your business is performing. There are alternative figures you can look at though, some that may give you a better insight into how the business is doing, especially when you operate more than one site.

I recently completed a job for a client who was concerned by variances in performance between his two sites. Like him I reviewed the usual KPI suspects, and though I could see the variances I had no clearer idea of what the problem was than the client did.

There is more than one way to look at your figures, and using alternate metrics often throws up results that normal KPI analysis fail to reveal. You don’t need a sophisticated POS system to obtain the data, though this would gather it instantly and present it in a uniform manner.

Sales per Customer

Example: a pub served 1,200 customers during the week and the gross income from bar sales was $3,765, so the average spend per guest was $3.14, gross food income was $18,230 giving an average spend of $15.19 per guest. Food costs were $4,863 or $4.05 per guest. Labour costs per week were $5,707 or $4.75 per guest.

On the surface, all looks well and good. But what if your other restaurants were achieving beverage sales of $3.47 on the same drinks list? This might indicate that there is a training need, service problem, or even a theft problem (unrecorded sales).

If food costs in other sites are an average of $4.21 per cover, it may be that the first site is more efficient in its production and waste management. These practices would benefit the business if they were adopted across all sites.

Though the labour costs are at around 30% of turnover and $4.75 per guest, if you compare and other sites are achieving $4.37 per guest, then there could be a problem with staff scheduling.

Sales per Employee

An alternative to sales per guest is sales per employee. Although this provides similar data, using this metric to cross reference your previous data gives you a better idea of how good your team is and whether they need additional training.

If we take the beverage sales per guest of $3.13 in the original example and compare it to the $3.47 as identified in the other sites, it is clear that there is a problem with the amount of spend being encouraged from guests in the first site. This could be training, or a different customer mix. However, if analyzing the average sales per employee at a given time reveals that there are large differences, it brings suspicion on the activities of the team members concerned. They may be under ringing sales and pocketing the money.

Analyzing your sales in this manner also makes it clearer if there is a problem with scheduling. Comparing sales per employee as well as sales per customer each hour will show where the schedule could be reviewed, and also demonstrate how staff can be encouraged to drive impulse purchases or special offers to encourage up-spending.



Other register and POS activity worth monitoring:

● Voids

● No sales

● Discount or complimentary sales activity

These will help you establish patterns of behaviour and weed out any unwanted practices or rotten eggs, should there be any.

Too many voids indicate there may be training needs.

Discounts or complimentary sales show there could be quality and/or service issues.

Don’t always review your business performance the same way. Taking a look at these new reports may tell you a whole lot more than your GP or NP results do.

Steve Southwell is with Southwell Auditing Consulting Training. Protecting profit, building business.