Is Shrinkage Really That Big of a Deal?

Is Shrinkage Really That Big of a Deal?

Let’s face it– every bar in the world experiences shrinkage and it’s a hard factor to completely eliminate. So, is it worth even trying? Or do the bar managers of the world just accept shrinkage as their fate and move on.

In short, yes. Shrinkage does matter. In fact, it can be responsible for losses as much as 25 percent of your bottom line. So it’s not exactly small change.

While shrinkage might be tough to address, there are a few relatively easy procedures you can implement to make an immediate difference. Read on to reduce the amount of product wasted in your bar.

Implement Measurement Practices

Measure, measure, measure. Make sure your entire staff uses jiggers when making drinks and establish a clear amount of alcohol needed for every drink on your menu. The same goes for pouring wine and draft beer, always establish a standard amount for each drink.

Beyond measuring the amount of alcohol in each drink, be diligent about measuring the bottles you have on hand with an actual scale, not just by eyeballing. Knowing exactly how much inventory not only increases accuracy with ordering and pouring, it helps discourage employee theft.

Improve Bar Layout

A good bar layout helps prevent accidental spills and other accidents when there are multiple bartenders working at a time. It also has plenty of spillover benefits– no pun intended– like faster service, happier employees, and more satisfied customers.

Avoid Over-Ordering

The first step to avoiding shrinkage is knowing exactly how much inventory you need to have. That’s where measuring comes in. However, it’s also important not to make the mistake of intentionally ordering more than you need as a safety precaution or because it seems easier.

Inventory that just sits on the shelf is not only negatively impacting your profit, it presents more opportunities for employee theft, which is unfortunately the cause of most shrinkage. You don’t want to make your bar a hostile place for your employees, so rather than treating them like criminals, limit the amount of product sitting unused so it’s immediately clear if anything is missing.

To avoid over-ordering accidentally, anticipate lead times for when you’ll run out of stock and use distributor discounts with caution. For more information on ordering inventory, please visit https://wisk.ai/beverage-inventory-order-management-software/.

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