Bar Inventory, Insights, Inventory, Management

What’s the Average Sitting Inventory in the Bar Industry?

By Stephen Ngo

Stephen Ngo

June 8, 2016

Posted in Restaurant Management, Industry & Culture

For bar owners and operators, efficient inventory practices represent a huge opportunity to reduce costs and run a more profitable bar.

Businesses that hold on to too much inventory waste time counting and recounting idle product. This idle product crowds storage space, which makes tracking your usage more difficult and servicing customers a complicated process—not to mention the losses that come from increased breakage and theft. The higher a bar’s excess inventory, the higher its exposure to unnecessary operating expenses and lost productivity, and the lower its general profitability.

By sinking cash into excess inventory, businesses also constrain themselves by reducing access to funds for other expenses, like rent and payroll. Excessive inventories mean that bars with otherwise healthy balance sheets can struggle to make these critical expenses in the short run, crippling their ability to keep the doors open. Better inventory practices represent an insurance strategy against this risk.

We’ve shown you some good practices for doing your liquor inventory. We’ve also discussed why inventory efficiency should be measured in weeks, not simply in units or dollars.

Though we usually recommend that you target 2-3 weeks of sitting inventory for individual items, we know that actual practices vary between bars. We also know that such variance is related not just to management proficiency, but also to the product mix unique to each beverage program, as well as the volume of product sold.

We’ve taken a look at our customers’ ordering and inventory data to measure the inventory programs of bars and restaurants across the country. We then analyzed how that varied by product category, in order to develop more specific targets for your bar’s operations.

Let’s dive into the data.

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