sales concept in bar
definitionthe term sales is defined as revenue resulting from the exchange of products and services for value. In our industry, food and beverage sales are exchanges of the products and services of a restaurant, bar, or related enterprise, for value. We normally express sales in monetary terms, although there are other possibilities.
Actually, there are two basic groups of terms normally used in food and beverage operations to express sales concepts: monetary and nonmonetary.
Total SalesTotal sales is a term that refers to the total volume of sales expressed in dollar terms. This may be for any given time period, such as a week, a month, or a year. For example, total dollar sales for the Rush Hour Inn was expressed as $1,804,000 for the year ending December 31, 200X.
Total Sales by CategoryExamples of total dollar sales by category
are total food sales or total beverage sales, referring to the total dollar volume of sales for all items in one category. By extension, we may see such terms as total steak sales or total seafood sales, referring to the total dollar volume of sales for all items in those particular categories.
Total Sales per Server.Total sales per server is the total dollar volume of sales for which a given server has been responsible in a given time period, such as a meal period, a day, or a week. These figures are sometimes used by management to make judgments
about the comparative performance of two or more employees. It may be helpful, for example, to identify those servers responsible for the greatest and for the least dollar sales in a given period.
Total Sales per Seat.Total sales per seat is the total dollar
sales for a given time period divided by the number of seats in the restaurant. The normal time period used is one year. This figure is most frequently used by chain operations as a means for comparing sales results of one unit with those of another. In addition, the National Restaurant Association determines this average nationally so that individual operators may compare their results with those
of other similar restaurants.
Sales Price.Sales price refers to the amount charged each customer purchasing one unit of a particular item. The unit may be a single item (e.g., an appetizer or an entre´e) or an entire meal, depending on the manner in which a restaurant prices its products. The sum of all sales prices charged for all items sold in a given time
period will be total dollar sales for that time period.
Average Sale.An average sale in business is determined by adding individual sales to determine a total and then dividing that total by the number of individual sales. There are two such averages commonly calculated in food and beverage operations: average
sale per customer and average sale per server.
Average Sale per Customer.Average sale per customer is the result of dividing total dollar sales by the number of sales or customers. For example, if total dollar sales for a given day in a restaurant were $1,258 and the restaurant had served 183 customers,
then the average dollar sale would be $6.87. This average is determined as follows:
Average sale total dollar sales/total number of covers
The average dollar sale concept is also expressed as the average check or the average cover, which are synonymous terms in our industry. The average dollar sale is used by foodservice operators to compare the sales performance of one employee with that of another, to identify sales trends, and to compare the effectiveness of various menus, menu listings, or sales promotions.
This figure is of considerable interest to managers, who are likely to be interested in following business trends. If the average sale decreases over time, management will probably investigate the reasons for the changes in customer spending habits. Possibilities include a deterioration in service standards, customer dissatisfaction with food quality, inadequate sales promotion, and changes in portion sizes.
Average Sale per Server.Average sale per server is total dollar sales for an individual server divided by the number of customers served by that individual. This, too, is a figure used for comparative purposes, and it is usually considered a better indicator of the sales ability of a particular individual because, unlike total sales per server, it eliminates differences caused by variations in the numbers of persons served.
All of these monetary sales concepts are common in the industry and are likely to be encountered quickly by those seeking careers in food and beverage management. Yet there are a number of nonmonetary sales concepts and terms that should also be understood.
Nonmonetary TermsTotal Number Sold. Total number sold refers to the total number of steaks, shrimp cocktails, or any other menu items sold in a given time period. This figure is useful in a number of ways. For example, foodservice managers use total number sold to identify unpopular menu items, in order to eliminate such items from the menu. In addition, historical records of total numbers of specific items sold are useful for forecasting sales. Such forecasts are helpful in making decisions about purchasing and production.
Total number of a specific item sold is a figure used to make judgments about quantities in inventory and about sales records, as discussed in later chapters.
Covers.Cover is a term used in our industry to describe one diner, regardless of the quantity of food he or she consumes. An individual consuming a continental breakfast in a hotel coffee shop is counted as one cover. So is another individual in the same coffee shop who orders a full breakfast consisting of juice, eggs, bacon, toast, and coffee. These two are counted as two covers.
Total Covers.Total covers refers to the total number of customers served in a given period—an hour, a meal period, a day, a week, or some other period. Foodservice managers are usually particularly interested in these figures, which are compared with figures
for similar periods in the past so that judgments can be made about business trends.
Average Covers.An average number of covers is determined by dividing the total number of covers for a given time period by some other number. That number may be the number of hours in a meal period, the number of days the establishment is open per week, or the number of servers on duty during the time period, among many other possibilities. The following are some of the more common:
Covers per hour- Total covers/number of hours of operation
Covers per day Total covers/number of days of operation
Covers per server total covers/number of servers
The averages so derived can be of considerable help to a manager attempting to make judgments about such common questions as the efficiency of service in the dining room, the effectiveness of a promotional campaign, or the effectiveness of a particular server.
Seat Turnover.Seat turnover, most often called simply turnover or turns, refers to the number of seats occupied during a given period (or the number of customers served during that period) divided by the number of seats available. For example, if 150 persons
were served luncheon in a dining room with 50 seats, seat turnover would be calculated as 3, obviously meaning that, on average, each seat had been used three times during the period. Seat turnover may be calculated for any period, but is most often calculated for a given meal period.
Sales Mix.Sales mix is a term used to describe the relative quantity sold of any menu item as compared with other items in the same category. The relative quantities are normally percentages of total unit sales and always total 100%. For example, assume that the Sherwood Island Lodge offers a menu with five entre´e items
represented by the letters A, B, C, D, and E. Total portion sales for each of these for the month of August are provided in figure.
During the month of August, a total of 8,000 entre´es were sold, 1,000 of which were portions of A. Thus, sales of A represent 12.5 percent of total unit sales, calculated as follows:
1,000/8,000 .125 12.5%