Frequently Asked Questions

What is a good gross profit margin for a bar or pub in the UK?

This depends a lot on how much you are paying for your stock and how much you are then able to charge for it, however a well-run bar or pub should typically achieve a beverage gross profit margin of between 65% and 72%, depending on the sales mix.
Draught beer tends to generate lower margins than spirits, cocktails, and soft drinks. If your overall GP is consistently falling below 60%, there are almost certainly issues in the operation — potentially overpouring, wastage, poor stock controls, or unrecorded transactions.  A healthy margin is achievable; the challenge is sustaining it consistently.

What is a good food gross profit margin for a restaurant?

Most restaurants target a food gross profit margin of between 60% and 70%, though this varies significantly by cuisine type, service format, and price point. A fine dining restaurant may achieve 70%+, while a high-volume casual dining operation may sit closer to 60–65%. If your food GP is regularly underperforming against your theoretical margin, the culprit is usually over-portioning, menu costing that hasn't kept pace with ingredient price increases, or poor stock management.

What is the difference between actual and theoretical gross profit?

Your theoretical GP is what you should be achieving based on your menu costings and the volume of products sold. Your actual GP is what you are genuinely achieving once stock variances, waste, overpouring, and unrecorded sales are taken into account. The gap between the two is where your missing profit lives. A small gap of 1–2% may be acceptable; anything above that warrants investigation.

Why is my gross profit lower than it should be?

There are several common causes....

  • Portion sizes may have drifted beyond your standard specifications.
  • Staff may be over-pouring drinks or building cocktails without following the correct recipe.
  • Supplier deliveries may be arriving short and not being challenged.
  • Stock may be expiring due to over-ordering.
  • Wastage may be untracked. In some cases, there may be dishonesty — either at the bar or through theft further up the supply chain.

Identifying the root cause requires a structured investigation rather than simply counting stock.

What is menu engineering and how does it improve margins?

Menu engineering is the process of analysing each dish or drink on your menu by two factors: how profitable it is, and how popular it is.

Items that are both high-margin and high-volume are your stars — they should be prominent and protected. Items that are low-margin and low-volume are candidates for removal or replacement.

The goal is to shift your sales mix towards higher-margin products, reduce the drag of unprofitable lines, and ensure every item on your menu is pulling its weight financially.

What is blind till declaration and why does it matter?

A blind till declaration is when a staff member declares the cash in their till before they can see what the EPOS system shows the float should be.

This removes the ability to adjust the declared cash to match the expected figure, making discrepancies visible immediately. It is one of the most effective and low-cost controls for identifying cash handling issues, whether accidental or otherwise.

Without it, shortfalls can go undetected for weeks or months.

How do I calculate my food or beverage cost percentage?

The formula is straightforward:

(Opening Stock + Purchases − Closing Stock) ÷ Net Sales × 100

This gives you your cost of sales as a percentage of revenue. For example, if your beverage cost of sales is £8,000 and your net beverage revenue is £24,000, your cost percentage is 33.3%, which equates to a GP of 66.7%.

The challenge is not the calculation itself — it is ensuring the inputs (stock counts, purchase records, sales data) are accurate.

What is stock variance and how is it calculated?

Stock variance is the difference between what your stock records say you should have (your theoretical usage) and what you actually have on the shelves.

If your sales data says you should have used 20 bottles of house red in a given week but your stock count shows 25 bottles have been used, you have a variance of 5 bottles.

Calculating variance accurately requires your EPOS sales data, your delivery records, and a precise physical stock count.

Unexplained variances consistently above 2–3% are a warning sign.

What causes overpouring and how much does it actually cost?

Free pouring is one of the most common and costly habits in bar operations.

A member of staff, who thinks he's Tom Cruise in Cocktail, over-pours a 25ml spirit measure to 35ml is giving away 40% more product on every drink.

Across a busy bar serving 200 spirit measures a night, that could represent £40–£80 in lost margin per day — or £15,000–£30,000 per year from a single measure alone.

The fix is simple: mandatory jigger use, standardised cocktail specifications, and regular yield checks. The challenge is embedding that discipline consistently.

How does draught beer wastage impact profitability?

Draught beer is one of the highest-wastage products in any bar operation. Poor line maintenance leads to fobbing and excessive waste during pulls.  Inconsistent head pouring means every pint is losing margin.

Cask ales have a limited shelf life and if not sold quickly enough will need to be cleared off the bar at a total loss.

Cellar temperatures and dispense technicalities can also have a major impact - It's wise to nip issues in the bud with a callout to minimise losses. 

A draught line that is wasting 10–15% of its product — which is not uncommon — can represent thousands of pounds of lost revenue annually.

Yield checks on each line are essential to quantifying and controlling this.

How do poor delivery controls lead to stock loss?

Every short delivery that goes unchallenged is a direct cost to your business. A supplier delivering 23 cases when the invoice says 24 — and the delivery is signed off without checking — means you have paid for a case you never received.

Across weekly deliveries of multiple products from multiple suppliers, unchecked short deliveries can add up to a significant annual loss.

Robust delivery controls mean counting every item against the delivery note before signing, and raising discrepancies immediately.  If you are seen to be a soft touch in this area you will definitely be taken advantage of.

FAQ on Clarity by David Holden

What does Clarity by David Holden do?

Clarity is a specialist F&B consultancy focused on hospitality profit recovery. The service is built around identifying where restaurants, pubs, and hotels are losing money across their food and beverage operations, and then fixing the underlying issues in practice.

This goes beyond standard stocktaking — it involves root cause analysis, operational process improvement, and hands-on support to ensure changes are implemented and sustained.

How is Clarity different from a standard stocktaking service?

Most stocktaking providers count your stock, calculate your variance, and produce a report. What happens next is largely left to the operator. Clarity takes a different approach. The focus is not just on measuring the problem but on understanding why it is happening, what it is costing the business in real terms, and what needs to change operationally to fix it.

The outcome is not a report — it is measurable improvement in gross profit margins.

Who do you work with?

Based in Sutton Coldfield, Clarity works with independent pubs, restaurants, and hotels, as well as multi-site operators across the UK hospitality sector.

The service is particularly relevant for operators who are experiencing unexplained margin loss, businesses that are growing and need stronger controls in place, and operators who know something is wrong but do not have full visibility into where the problem lies.

What does a Profit Diagnostic involve?

A Profit Diagnostic is a structured review of your stock, processes, and cost of sales to identify where profit is being lost.

It includes a physical stock audit with full commercial analysis, a review of your product sales, your purchasing and delivery processes, an assessment of your pour controls and portion consistency, a review of your cash handling and EPOS practices, and a clear, actionable findings report.

The outcome is a precise understanding of where your margins are going — and a roadmap for recovering them.

How long does it take to see results?

Results depend on the complexity of the issues identified and the scale of changes required. In straightforward cases, measurable improvements in gross profit margins can be seen within four to six weeks of implementing the recommended controls.

In more complex turnaround situations — such as operations with multiple embedded issues across stock, cash, and processes — a three-month timeline to achieve stable, consistent profitability is realistic.

The case study on this site documents a bar operation where a £10,000-per-month loss was turned into consistent monthly profit within three months.

Do you only focus on the bar, or do you cover the kitchen and food operation too?

Clarity covers both food and beverage operations.

While bar profitability is often where the most acute issues are found — given the volume of transactions and the complexity of stock management — food GP is equally important.

Menu costing, portion control, food wastage, delivery controls, and kitchen stock management are all within scope.

The approach is always to look at the full picture rather than to address one element in isolation.

What information do you need to get started?

To begin a meaningful assessment, it is helpful to have access to recent P&L data, EPOS sales reports, current stock counts or recent stocktake reports, purchasing invoices, and any existing menu costings. However, if some of this information is missing or unreliable, that itself is often a useful starting point.

A lack of accurate data is frequently part of the problem.

Do you offer ongoing support after the initial work is done?

Absolutely. I'd recommend ongoing control and support if you wish to maintain the improvements achieved and prevent issues from returning.

This would typically involve periodic stock and control reviews, performance tracking, and continued operational support.

The frequency is tailored to the needs of each business.

How do I find out if my business could benefit from working with Clarity?

The simplest starting point is a Profit Review conversation.

This is an initial discussion about your operation, the margins you are achieving, and where you feel the gaps might be. There is no obligation, and it is often enough to give a clear initial sense of whether there is a meaningful opportunity to recover profit.

You can book a Profit Review via the Contact page.