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I lived in SF for 15 years and would talk to many of the restaurateurs there. What I hear almost all of them say: "I should have never opened a restaurant - I s

I lived in SF for 15 years and would talk to many of the restaurateurs there. What I hear almost all of them say: "I should have never opened a restaurant - I should have just opened a bar." Every. Time. Apparently the margins on food in restaurants is close to zero. However, any money they manage to make is from alcohol sales. So - eventually they realize - just sell alcohol.

caoilte 4y ago
The other side of this coin (as the maxim goes) is that the margin on drinks in bars is close to zero and that the only way they make any money is by selling food.
- bogomipz 4y ago
  This is completely false. The standard measurement bars use is called the "pour cost" which is inventory usage(in cost) divided by sales. The pour cost average for a bar is between 18-20%. That's a gross margin of 80 to 82 cents on each dollar a customer spends on drinks. That's a pretty spectacular margin. A well-run bar on a busy night is practically printing cash.
  - deleted 4y ago
    [deleted]
- moate 4y ago
  As someone who spent a LOT of time working in/running professional kitchens in the US (NJ specifically) I would just like to say: CITATION NEEDED
- asdff 4y ago
  A bud light at a bar is like $12 now at most bars. The case at the gas station across the street is $18. The splash of coke in the $10 well drink that begins with a cup scooped full of nearly free ice must have been about five cents of syrup and one cent of CO2, the pour probably came out of a bottle that costs like $15. Maybe that maxim was true back in the day when people could actually afford to get drunk at bars, but not anymore.
  - z_rex 4y ago
    That's an awfully high cost for well liquor. The 'good' well liquor will be about $10 max, and the rotgut can be as low as $4 if you but a couple cases at a time.
  - volkl48 4y ago
    I do most of my drinking in high cost environments (NYC + Boston) and that still seems way too high of an estimate. $12+ for a beer is typically the high end of craft beer, not Bud Light.
- z_rex 4y ago
  I run a restaurant. A regular domestics (bud, miller, coors) run about $1.10 per can/bottle if you get a single case. Busy bars ordering 10 cases at a time will be getting discounts. Unless you're going to the shittiest dive bar in town, a $3 domestic bottle is nearly 200% markup.
  - reducesuffering 4y ago
    Surely domestics have to be cheaper than that from suppliers. My local Total Wine has $0.45 Miller cans.
- floppydiskette 4y ago
  This is the opposite of true. Not even factoring in the cost of labor and everything else related to having a kitchen.
windowsrookie 4y ago
I've always wondered how restaurants in SF can find employees. I've never lived in San Francisco but everyone tells me you can't survive there unless you make at minimum $100k. So where do these cooks making $15/hour live? These days nobody will rent to you unless you make 2.5x rent so how does this work?
- claaams 4y ago
  All the artists/musicians and a bunch of interesting people that bring culture and life to the city start leaving is how it works.
- RajT88 4y ago
  Lots of people live with parents. Or live a bunch of people in an apartment. There's cheaper properties a train ride away, around Brisbane.
- asdff 4y ago
  Multiples to a bedroom or rent control and hang on for dear life.
- AlwaysRock 4y ago
  You cant live comfortably... But there is a differance in literally starving and being able to just scrape by. Lot's of people all over the globe live in pretty terrible situations where they just scrape by. You just come to expect and accept a different quality of life.
- reducesuffering 4y ago
  There's a large cohort of people that have grown up in the Bay Area, working from ages 16-28 (primarily, but also beyond) at their parents' home in low paying jobs. Plus, SF is connected via BART to a few much cheaper areas like Hayward, Richmond, and Antioch where renting a room could be something like $600-$800 / month.
s_dev 4y ago
As corollary -- as soon as a recession hit in Ireland the bars and pubs that are most likely to survive were ones that served food -- gastropubs. Many bar owners who closed during Covid will tell you they should have served food. The reason being is a bar/restaurant can have a symbiosis where the food encourages drinking and the drinking encourages food and this is great for business. Selling drink is very profitable but you need a critical mass of people to to attract other drinkers -- pubs who serve food hit this critical mass easily.
- dmurray 4y ago
  > Many bar owners who closed during Covid will tell you they should have served food. This is a bit disingenuous. There was literally a law allowing pubs to open only if they served food. That said, a huge amount of pubs in Ireland have added food to their offerings in the last 20 years, even before Covid, so it must make business sense.

caoilte 4y ago

The other side of this coin (as the maxim goes) is that the margin on drinks in bars is close to zero and that the only way they make any money is by selling food.

bogomipz 4y ago
This is completely false. The standard measurement bars use is called the "pour cost" which is inventory usage(in cost) divided by sales. The pour cost average for a bar is between 18-20%. That's a gross margin of 80 to 82 cents on each dollar a customer spends on drinks. That's a pretty spectacular margin. A well-run bar on a busy night is practically printing cash.
- deleted 4y ago
  [deleted]
moate 4y ago
As someone who spent a LOT of time working in/running professional kitchens in the US (NJ specifically) I would just like to say: CITATION NEEDED
asdff 4y ago
A bud light at a bar is like $12 now at most bars. The case at the gas station across the street is $18. The splash of coke in the $10 well drink that begins with a cup scooped full of nearly free ice must have been about five cents of syrup and one cent of CO2, the pour probably came out of a bottle that costs like $15. Maybe that maxim was true back in the day when people could actually afford to get drunk at bars, but not anymore.
- z_rex 4y ago
  That's an awfully high cost for well liquor. The 'good' well liquor will be about $10 max, and the rotgut can be as low as $4 if you but a couple cases at a time.
- volkl48 4y ago
  I do most of my drinking in high cost environments (NYC + Boston) and that still seems way too high of an estimate. $12+ for a beer is typically the high end of craft beer, not Bud Light.
z_rex 4y ago
I run a restaurant. A regular domestics (bud, miller, coors) run about $1.10 per can/bottle if you get a single case. Busy bars ordering 10 cases at a time will be getting discounts. Unless you're going to the shittiest dive bar in town, a $3 domestic bottle is nearly 200% markup.
- reducesuffering 4y ago
  Surely domestics have to be cheaper than that from suppliers. My local Total Wine has $0.45 Miller cans.
floppydiskette 4y ago
This is the opposite of true. Not even factoring in the cost of labor and everything else related to having a kitchen.

windowsrookie 4y ago

I've always wondered how restaurants in SF can find employees. I've never lived in San Francisco but everyone tells me you can't survive there unless you make at minimum $100k. So where do these cooks making $15/hour live? These days nobody will rent to you unless you make 2.5x rent so how does this work?

claaams 4y ago
All the artists/musicians and a bunch of interesting people that bring culture and life to the city start leaving is how it works.
RajT88 4y ago
Lots of people live with parents. Or live a bunch of people in an apartment. There's cheaper properties a train ride away, around Brisbane.
asdff 4y ago
Multiples to a bedroom or rent control and hang on for dear life.
AlwaysRock 4y ago
You cant live comfortably... But there is a differance in literally starving and being able to just scrape by. Lot's of people all over the globe live in pretty terrible situations where they just scrape by. You just come to expect and accept a different quality of life.
reducesuffering 4y ago
There's a large cohort of people that have grown up in the Bay Area, working from ages 16-28 (primarily, but also beyond) at their parents' home in low paying jobs. Plus, SF is connected via BART to a few much cheaper areas like Hayward, Richmond, and Antioch where renting a room could be something like $600-$800 / month.

s_dev 4y ago

As corollary -- as soon as a recession hit in Ireland the bars and pubs that are most likely to survive were ones that served food -- gastropubs. Many bar owners who closed during Covid will tell you they should have served food. The reason being is a bar/restaurant can have a symbiosis where the food encourages drinking and the drinking encourages food and this is great for business. Selling drink is very profitable but you need a critical mass of people to to attract other drinkers -- pubs who serve food hit this critical mass easily.

dmurray 4y ago
> Many bar owners who closed during Covid will tell you they should have served food. This is a bit disingenuous. There was literally a law allowing pubs to open only if they served food. That said, a huge amount of pubs in Ireland have added food to their offerings in the last 20 years, even before Covid, so it must make business sense.