Bar Menu Pricing
An In-Depth Guide To Increase Revenue
Labor Costs
Target Labor Costs
Have a goal in mind!
A common labor cost goal in the industry is about 12% of revenue.
8%-10% covers the cost of the bartenders, bar backs, and servers.
2-4% covers the cost of the bar manager.
For Example…
Berkeley’s minimum wage is $16.99/hr (highest in the country)
Total wages for a 6 hour shift at minimum wage is approximately $102
To achieve 10% labor cost a bartender’s or server’s sales should be $1,020
We staff on average 1 Bartender per 100 guests
Per cap at this staffing level is $10.20 minimum to maintain 10% labor cost
Calculating Pour Costs
Not the least expensive and not the most expensive compared to competitors
Goldilocks and the 3 Bars
18% Total Pour Cost
The pour cost target should be 18% for your total menu
For example:
1 liter of New Amsterdam Vodka is $9.75
22 1.5oz pours per liter bottle, 16 per 750ml
Per Pour cost is $0.44
Menu Price = $2.50
Does not account for loss
Accounting For Loss
Assume 10% loss
Accounts for spillage and over-pours
19 1.5 oz pours per liter and 14 per 750ml
Pour cost accounting for loss = $0.51
Menu price = $3
Varying Pour Cost
Well liquor and high volume pour costs should be between 5%-10%
The margins of your well and high volume products enables you to price premium products at a more approachable price
High-end and low volume product can be priced between 20%-25%
Bottled beer is more expensive than draft - Price Accordingly!
Use a spreadsheet that calculates total menu pour cost accounting for variables
For example…
Menu Price Psychology
Well prices should be within $2 of mid-tier called spirits
Keeping prices in close proximity allows guests to upsell themselves
Guests look for value
New Amsterdam Vodka - $3 (18%)
Tito’s Vodka - $7 (18%)
Grey Goose - $11 (18%)
New Amsterdam Vodka - $6 (9%)
Tito’s Vodka - $7 (18%)
Grey Goose - $9 (21.5%)
VS
None of this matters without inventory control
Managing Inventory
5 Things to track:
Bottle Price
Starting Inventory
Ending Inventory
Product Purchases
Product Used\Depleted
Calculating Monthly Pour Cost
Divide your monthly revenue by the cost of product used
For example:
Monthly Revenue = $20,000
Monthly Cost = $3,500
Pour Cost = 17.5%
Product Ordering: Tips and Tricks
Order in bulk - Most distributors offer discounts on multiple cases
Ask about combos and specials
Host branded events
Rotate product based on prices