1983-05-03 - Laserfiche WebLink

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I I I Council Work Session May 3, 1983 Page Two Michael Leahan, food preparation supervisor, reviewed the procedures in buying food and the savings incurred when using greater controls and making purchases through less expensive vendors. Mr. Rubin stated profit margin for food now is 66% and that the average for pre-packaged food is 57% -- 50% margin is food for pre-packaged food. Previous to November, 1982, the food cost percentages had been 120%, operating in the red. Councilmember Schmidt questioned where the liquor department was heading, in reference to profit margin percentages. Mr. Rubin stated that all percentages were headed towards their goals. He emphasized that there had been great gains made so far and that in time the goals would be met. He emphasized that past percentages had been operating with unacceptable margins. Greg Lyford, former bar supervisor, reviewed the bar pricing guidelines, use of new glassware, instruction for employees on pouring, pricing, etc., speciality drinks, etc. The Liquor Director stated the bar cost percentage in January and February was 39%, March was 31%. The goal is 28-30% overall with beer goal at 32%, wine at 50% and liquor at 21-27%. Liquor in March was 14%. Mr. Rubin stated he had toured the off-sale at Brandywine and felt it was an impressive facility. He further stated the new liquor management is implementing the kind of controls that should be implemented in any business. He stated the City would have to look at the figures to see if it all works. and that they must be accurate and timely; every three to four months is too long. He felt monthly reports are necessary, and that it appeared that things are now under control. He further indicated that figures reflecting sales, cost of goods sold and gross margins were necessary, and that a physical inventory should be done every quarter at a minimum. Currently, he stated, it was necessary to do an inventory May 31st or June 5th, check the margins, and then do another inventory in the Fall. The Liquor Director stated that 1982 inventories were accurate, but prior to that, accuracy of the figures as done by past management, was uncertain and questioned by the State Auditor's Office. Mayor Harcus questioned what would be a good net operating income for a successful operation? Mr. Rubin stated that a net income of 5% profit before tax for restaurants and l~-2% profit before tax for bottle shops was considered good. He further responded that management of in- ventories is extremely important.