The Cabinet Designer Barman: What’s the price of a burger and a beer during a pandemic?
Updated: Nov 10, 2020
Throughout my career, I have been lucky enough to have travelled around the world and have paid the tab everywhere I go - now that industry is in trouble worse than any other time in history.
In March bars, restaurants and other hospitality venues were told to close. Blood, sweat and tears were poured into putting measures in place to reopen. From plastic screens, half capacity, temperature checks, extra staff, tracking apps, no background music, reduced menus. Think of some type of measure to increase social distancing (or reduce infections) and it will be in place somewhere.
This was done at the expense of the businesses and slowly but surely it started to rebuild customer confidence. Credit where credits due, Eat out 2 Help out did go a long way to putting bums of seats. As the second wave started to grip Europe, rumors of a 10pm curfew started to hang above the industry like the sword of Damocles.
Once that sword dropped the industry was mortally wounded.
To understand the true problem venues were facing I need to explain a little bit about how bars make their profit (obviously exact numbers vary from site to site).
Food doesn’t make much money. It has a high cost of goods and lots of wastage. (Can’t sell the same “soup of the day” three days in a row and expect customers to be impressed). Once upon a time when I was working for a large bar, food costs were 35% and wastage wasn’t allowed to be more than 10%. On top wage costs were around 35%.
So putting that in real money a £10 burger meal cost the venue £8. Leaving £2 for Rent, business rates, gas, electricity, music costs, legal fees, council tax etc, etc, etc.
To make food service more profitable venues will push “wet” sales. Wet products costs are much more controlled. Cost of goods should be less than 25% and again wastage no more than 5%. (Tonic water and cans of beer don’t go out of date very quickly).
In another twist some venues are forced to buy beer and packaged products (soft drinks, bottled beers) from a brewery or lose their business. These breweries can set the price as high as they like.
Now take away half of the number of seats in the venue and double the staff costs. That’s what reduced capacity and “table service only” actually means to a venue.
As we are now approaching Lockdown 2.0, the doors of the bars and restaurants will sadly once again be closing. But, when they are able to reopen, think about what this actually means to hospitality venues.