The Secret Shopper Chronicles: Part 3. Too much money can be a problem. Not really.

Beautiful waitress serving handsome businessman in a classy bar

In our last post, Numbers matter. Big numbers matter more, we discussed the high cost to bars when bartenders over-pour liquor. We reviewed the Kerr Study (2008) where researchers evaluated 80 bars in 10 California counties and discovered bartenders over-poured one-liquor drinks on average by 42%. Instead of pouring 1.50 ounces in a rum and coke (or any other one-liquor cocktail), the bartenders poured 2.13 ounces.

If you over-poured all your cocktails by 42%, then only 70% (1.50/2.13) of the liquor you purchased was really needed for the sales created. So a 42% over-pour means 30% of the liquor purchased (that’s profit) is simply given away free. YIKES.

In Orange County, our secret shoppers have identified on average, a 55% one-liquor drink over-pour. With new clients, we have found as low as 7% to as high as 113% (3.19 ounces of liquor in a one-liquor drink; the customer paid for 1 but the bartender gave the customer more than 2 drinks – for the price of 1 drink).

In Orange County, bartenders over-pour three- and four-liquor cocktails by an average of 78%.

Doing a weighted average of two one-liquor cocktails sold for every one multi-liquor cocktail sold, bartenders over-pour liquor in Orange County by 63%. The 63% average over-pour in Orange County means 39% of the liquor purchased is given away free.

The kicker: the 39% of liquor purchased that is then given away free does not reveal the full financial consequences caused by over-pouring liquor. There’s the opportunity costs – lost sales due to customers ordering fewer drinks because they are getting intoxicated on the cheap.

Here’s an update since the last post…

I have contacted several clients who significantly reduced or eliminated their liquor over-pouring, and I asked, “Have your bartenders received any customer blowback from reducing the amount of liquor in their drinks?” Every client asked said no – they had received zero blowback from customers as a result of significantly reducing/eliminating the free liquor poured.

If you pour the correct amount of liquor in the right size glassware, the customer can taste the liquor and is satisfied.

Two of my contacts have contacted me regarding “problems” they have encountered by using my services to reduce over–pouring and run a tighter bar.

Client 1: Months after working with me, the client stated his bar was making $10,000 more profit a month from using my services. This client began with a 76% over-pour. In fact, this client was gracious enough to meet with Phyllis Marshall of Food Power to share the success of my services. Several more months later, the bar owner contacted me, asking if I could talk and email with his tax attorney to explain how he could have record liquor sales with lower cost of goods. I shared training material, reports, and connected the financial dots and everything was fine.

Client 2: A client emailed me this: “I am in the middle of a State Board audit at the XXXXX and I am trying to show them why we had such a spike in margins from one year to the next.” The email included a request for spotter reports and an invoice for my services. This client began with a 73% over-pour. Everything turned out fine after the client shared the documents with the auditor.

Using our secret shoppers to reduce the over-pouring of liquor can significantly save your business money. In our next post, we’ll discuss the many other benefits from using secret shoppers at your business.