Thursday, April 05, 2012

Facebook: Licensees Supporting Licensees

My background is in independent retail catering - bars restaurants and private members' clubs. As a manager of other peoples' businesses I never got a factual GP of less than 67% overall. The only products I was allowed to consider 'discounting', to make for a balanced menu that would not scare punters off, were occasional food items like Dover Sole which would have been over the top at 65%GP.

The ABSOLUTE rule of thumb was to return 65% GP overall. Over 65%: comfortable - under 65%: certain disaster. If it ever got close to dipping toward 65% ALARM BELLS started ringing, largely in the form of company accountants shouting loudly: 'apocalypse, catastrophe, pestilence, damnation, hell fire, plague and a hundred years of famine are going to befall us if these margins slip any further'.

Within all of that I'd look to get 80%+ on cocktails and 70% on house wines and bottle beers so I could give better value on high end products and sell at lower margins.

When I signed a lease on a tied pub in 1995 I stole myself at the wholesale price of beer and figured that with canny buying and astute pricing on non tied products I could get 60% overall. It always was a struggle to keep it there and in latter years, as my beer margins were eroded by the pubco increasing its own margins - getting 60% overall was nigh impossible. This led to business pestilence, catastrophe, hell fire and damnation... etc

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