How to Improve Inventory Behind the Bar or Pub

A weekly glance in your backroom to determine stock levels might seem sufficient, but the reality of a pub or bar inventory is so much more complex.

Inventory management is paramount, and it’s important to implement best practices that optimise your business operations – especially at a bar or pub.

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What is bar inventory?

The inventory behind your bar includes the complete list of liquor and other stocked products you use to serve your customers. This would include any juices, sodas or other garnishes that are served in the drinks listed on your menu.

Why is bar inventory important?

Inventory is the lifeblood of your bar and poor management can be a killer. With too little inventory, your bar misses out on sales and tarnishes its reputation. On the other end, too much inventory is a major cost for your bar and creates the need for additional storage space. Excess inventory also increases the risk of waste.

How can you manage inventory at your bar?

Inventory management can be done manually, but that can bog down other operations. Late nights in the back carefully counting stock can be tedious and take away time from other planning processes that aid the growth of your bar. So how can you control your bar inventory and successfully manage your bar?

Inventory management software automates the process and frees up your very valuable time. Look for software that integrates with your bar point of sale as that creates a more cohesive flow in your daily operations. With a unified system, the software can automatically track inventory when a bartender rings up a drink and you can see stock levels in real-time.

Benefits of a successful inventory management system

Here are five things an effective inventory management system can do when you first open a bar.

Reduce drink shortages
Customers will remember when you were out of their favourite drink the next time they are deciding where to go on Friday night. That means that running out of stock actually results in the loss of business. With a comprehensive inventory management system, you can better manage your bar inventory by forecasting materials needed, preventing these shortages and improving customer service.

Optimise alcohol order size and purchasing frequency
Instead of ordering a product when it runs out, you can strategically plan a bulk order of materials that minimises purchasing and shipping costs.

Avoid rush orders
When you abruptly run out of vital bar materials, it forces you to overnight products or rush-order supplies. That can be a spendy proposition. Because of the size and weight of alcohol cases, rush orders on liquor and wine have very high costs, which can put an unexpected dent in your carefully planned budget. Better inventory management and planning reduces the need for rush orders and saves you from unplanned costs.

Reduce waste at your bar
Bars lose a good amount of sales from theft, spilt drinks, and free drinks. Often bartenders and servers don’t realise how much they waste. With an inventory management system, you can showcase your bar inventory data and come up with preventive measures.

Increase profit
Real-time bar inventory data can help you make decisions about sales and future purchasing. When you track your inventory regularly, you can determine customer demand and see trends that help you better predict what to order (and what not to order). It can also help you determine how to price drinks based on their popularity.

An inventory management system can demystify your business. It not only helps you track stock but also can reveal customer buying trends and make it easier to forecast growth. Aside from using a system that works at your bar, here are seven additional ways to improve your bar inventory.

7 ways to improve your inventory management process

  • Take stock before your bar opens or after it closes, but keep that time consistent. Bar or pub owners who don’t follow a specific schedule aren’t getting an accurate representation of the inventory and how levels fluctuate from day to day or week to week.

  • Calculate bar inventory usage each month by first adding the starting inventory to the materials purchased throughout the month. Then subtract that from your ending inventory. This gives you an accurate representation of the amount of inventory you are using. It can help you identify trends to assist in the purchasing process.

  • Determine an inventory minimum for each of your materials and set up stock shortage alerts in your inventory management system. This lets you optimise a purchasing pattern and helps minimise costs. Alcohol turnover is dependent on demand, so make sure your minimum stock level is custom to each of your materials.

  • Apply a first-in, first-out (FIFO) method to your inventory, where the oldest inventory items are sold before newer inventory is received. This decreases the chances of products expiring before they are used.

  • A supply-savvy bar continuously reevaluates safety stock every few months.

  • Safety stock is an additional stock of the products that run the risk of selling out. This stock acts as a buffer to mitigate risk. But remember, too much on your shelf can cost your bar significantly.

  • Get your staff involved in a manual bar inventory auditing process. Have two individuals audit inventory separately, then compare. It can help prevent clerical errors.

If you find that specific material isn’t being used, look for ways to integrate it into popular drinks. This can help you push materials that might otherwise go to waste. It also lowers the number of items on your bar inventory list.