Gross Profit On Liquor Sales

[Duck1809]

Hi all - Just was wondering what a typical bar should have in gross profit on liquor sales.  I have a bar with no food.  Just beer and liquor sales.

Thanks,

Bryan from The Ducktail Lounge.

[wildfox]

We've been aiming for 15%, though it seems like some of the more "well" liquors that makes it super cheap.  And then some of the higher end stuff would be crazy at 15%... but maybe keep it there and if they buy it they buy it.

To piggy back off your question, I've been going back and forth about the margins on Draft beer vs Canned beer.  We've been trying to have a robust canned beer program, but they all end up being decently expensive per can, so if we use the same margins calculator for Draft vs Canned, the cans are decently more expensive.  In my mind, I justify a slightly higher food cost for the canned beer (call it 25%) to keep the price reasonable that people would pay it, but also that cans have less waste and less plumbing/resources (co2), so it's fine to mark it up less?

[rcmck]

Second the lower margin on cans, they would cost way too much and not sell, okus there is less loss, no pour off, no c02, no lines to clean, other than the occasional person who orders one and "doesn't like it".

[CReids]

We run into the same situation with 16oz 4 packs where at margin, we'd be looking at $25+ which makes no sense for any kind of volume, regardless of the beer.  We price 10%-15% lower for those, but make up the difference on selling singles where you can get a "draft" price at $7 or $8.

[adamj · Accepted solution]

Hello Iowa!

The average gross profit margin for a bar is between 70 and 80%. Mostly because of liquor cost . A beverage program with low pour cost is the beating heart of a profitable bar or restaurant.

The average net profit margin for a bar is between 10 and 15%. The gross profit margin is the difference between total restaurant sales revenue and COGS. 

This number depends on the type of bar you’re running, though.