Saturday, October 31, 2009

O level economics is about the level you're promoting DBD and you're not doing it from an operator's point of view but a scribbler's... Rule of thumb in the general catering trade is a 65% GP over all - for all products. Ever notice the price of bottle of beer in many a restaurant? 70% GPs or higher? The rule of thumb for pubs has always been 50%-55% Gp because a lot of the product is not packaged and traditionally fixed costs for pubs were lower than for much of the rest of the business economy - as in LOW rent and accommodation being part of the incumbent operator's deal, along with casual staff wages and wet led businesses having far lower overheads than food led.

Bob FM has it right as far as HMRC goes. Low GP% is an indicator that a business is possibly not being run, errr according to the Ted Tuppen principle - i.e. HONESTLY. Anything less than around 45% as a rule of thumb is commercial suicide for a normal catering business. If a business is designed to pile it high and sell it cheap cheap cheap in steady vast quantites then the Gp%s targets will be lower from the outset but that's not describing a normal pub business - that's a Taybarn.

So, 'David TayBarnes Doors' your pontificating about GP not being king is academic and pointless. When 45% is good enough for HMRC and as the very bottom end of a rule of thumb for an entire industry you are way off message.

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