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Successful bars don’t have slim margins. Restaurants often have slim margins because of food waste, but bars have pretty good margins. There is very good profit
by briandear 7y ago
Successful bars don’t have slim margins. Restaurants often have slim margins because of food waste, but bars have pretty good margins. There is very good profit on drinks: a 750 bottle of Tito’s vodka costs about $18 wholesale, provides 16 shots, at $5 per shot, that’s $80. Then discount 20% for spillage, that’s $64. Bartenders in the US make tips, so the hourly cost to the bar is pretty minimal, but in Europe, everything is more expensive, but the ratios remain similar because a $5 shot in Europe would be €8, with no tipping, but roughly 20% of that price would go to the additional labor costs.
A well managed bar that keeps comps and spillage under control can make a very good profit, especially on soccer nights. Restaurants have very different economics because there are costs for the kitchen and other food waste. Anyone who has ever been in the restaurant business knows that the real profit comes from selling the drinks, not the food.
- wolco 7y agoA bar with high margins will have other bars opening up near by and attempt to steal customers by offering lower price drinks driving down margins.
- huac 7y agoliquor licenses can be exorbitantly expensive (I hear $300k+ upfront in SF), plus increased recurring costs to comply with regulations; I'm sure authorities understand that establishments which serve liquor are more profitable in a vacuum, so they are likely to try and take a larger cut.
- lawnchair_larry 7y agoSince nobody spills 20% of every bottle of alcohol, is that 20% figure attributed to spillage intended to account for stronger pours and such?
- mandelbrotwurst 7y agoYeah, "and such" is often bartenders giving out free drinks
- BurningFrog 7y ago> Successful bars don’t have slim margins This just another way of saying that successful bars are successful.
- fabioborellini 7y agoThere are huge differences in alcohol prices across Europe (and in wages, too). In the Balkans or Portugal the shot could cost 1-2 euros, and in Norway over 10 euros.