Posts Tagged ‘ Bars/Lounges

Time to Lose (Inventory) Weight?

Well, this IS the month to trim fat, right? Every fitness center is filled, this is the number one month for fitness center enrollments, etc. But I’m not concerned here about body fat. Not that I don’t have plenty to be concerned about. The topic today is inventory fat. That’s right: inventory fat – otherwise known as dead inventory – is bad for you. 

What is dead inventory? Usually I think of beverage inventory. Mostly wine. Food inventory is easy to work out: banquet menus, employee feeding and systems for daily specials enable us to do this with some ease. We’ve gotten good at it because it’s perishable, and because storage space is limited. Dead beer inventory happens – hard to sell that summer seasonal in December. But in my experience it doesn’t represent a lot of dollars. Spirits can be a problem if you let distributors make your inventory decisions for you by giving you “free” sample products you wouldn’t otherwise order. How’s that banana-lime tequila cordial working for you, the one your distributor swore was the hottest thing going in (name any trendy area in California)?

So, we’re back to wine. I’ve seen dead inventories as high as $100,000. I’ve seen dead inventories that increase year after year after year with no movement. Does your bar accounting team wear dust masks when they do your beverage inventory? Like those extra pounds you want to shed, you know the risks of too much dead wine inventory:

  • Ties up cash
  • Perishable – it goes bad eventually
  • Takes up valuable storage space
  • Discourages you from updating your lists with the latest products

The most commonly used methods for reducing old inventory still work. “Selling” it to the kitchen and “selling” it to your sales and marketing department for VIP amenities, sales gifts, etc.

Here are some additional ideas:

  • Have a “Wine Sale” – Use this to build business on slower nights by offering it on those nights only. Example:  Sunday & Monday half-price bottles
  • Or, make a separate half-price wine list, noting that these are available until sold out
  • Or, where legal regulations allows this, prepare a half-price “to take home after dinner” list (unopened by you, of course)
  • Or, a variation – a BOGO. Buy a bottle from our “special” list for dinner, get a second bottle “free” to take home. (Promotional wording and procedures subject to your local regulations, of course.)
  • Pour off as a special BTG Happy Hour promotion
  • Create a “special” list with lucrative employee incentives for selling these itrems. Increase the value of the incentive with each sale. $2 for selling the first bottle. $3 for the second. Up to $5 per bottle. In other words, “give” the discount to your employee instead of the guest (or price it so the discount is “shared”).
  • Create the world’s best Sangria, and promote it

Those are my thoughts, let me know yours.

 

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When Selling the Right Thing is the Wrong Thing

Once last month I was thinking too hard and managed to work myself right into a contradiction. I was at a property roughly 75 miles from Wine Country.  I was congratulating management on their wine promotion, a simple but effective Best Practice, how I reported it. I was also congratulating myself on congratulating management as this would reinforce the Company’s excellent wine sales culture that I had supported in previous reports and meetings.

Regrettably, while compiling the report I encountered a sinister force trying to destroy the superb writing and brilliant conclusions of my masterful report: data. Oops. 

Turns out, the customer didn’t follow the well-merchandised direction: “drink more wine…drink more wine…” This is the thing about customers, that just when you expect them to do just one simple thing…well, you know.

Previously I had looked at sales, or the beverage mix. So, the spirits-beer-wine mix might be 30% – 32% – 38%. Great, we’re selling more wine. Keep it up. Promote wine. Good job. Report emailed.

Then I stumbled across some additional information. By “stumbled across” I mean I decided to look at the other data contained in the sales mix report. The other data was “number of items sold” though it wasn’t labeled clearly and this will continue to be my excuse for missing it first time around.

So, it turns out, incidents of beer sales surpass, significantly, incidents of spirits or wine sales in the lounge. Of course spirits and wine sales are critical and must be promoted, but promoted strategically. In fact wine sales and incidents of wine sales dominate room service beverage, for example.

But back to beer. Digging some more. Beer at this location wasn’t discounted significantly. Craft and imports were popular. The beer selection paled (pun?) next to the wine selection. There is a wine list but no beer list. There was excess capacity in the beer cooler. Management is smart and open minded. In other words, all of the usual obstacles were gone, and opportunities abound.

The hotel is adjusting inventories, re-writing beverage menus and developing new promotions. Adding some taps in the Lounge. Ratcheting up room service wine promos. All because of some data.

Six months from now I’ll request an updated mix and overall sales analysis,  and we’ll see happened. We’ll see together – I’ll share it here.

Those are my thoughts, let me know yours.

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