Rescue Your Margins: The Drinks Mix That Keeps Money in the Till

A pub can be busy and still broke if the mix is wrong. The fastest margin win is not selling more drinks, it is selling the right drinks and removing the dead weight.

Most wet-led pubs run a blended gross profit somewhere between 55% and 65%. The gap between the bottom and the top of that range is thousands of pounds a year on identical turnover, and it comes down to four things: what you stock, what you charge, how accurately you pour it, and what your team says at the point of order.

This is the framework I work through at The Anchor, and you can rebuild your own drinks mix with it in one focused week. UK on-trade prices include VAT at 20%, so every calculation below strips that out first.

Step 1: Map the current mix

Pull twelve weeks of sales from your till and export it to a spreadsheet. Twelve weeks smooths out a bank holiday or a heatwave. For every line, you want four columns: units sold, selling price, cost per serve, and cash margin per serve.

Then split your drinks into three tiers:

• High margin and high volume. These are your engines. Protect them.
• High margin but low volume. These need better placement, not deletion.
• Low margin and low volume. This is your first target.

That last group is almost always bigger than licensees expect. Anything selling fewer than five units a week ties up cash, cellar space and a tap line that could be earning. Before you delete it, ask one question: is anyone coming here specifically for this? If not, it goes.

The mistake to avoid: ranking by GP percentage alone. A 78% GP on a drink that sells four a week is worth less than a 62% GP on a drink that sells two hundred. Sort by cash margin per serve multiplied by volume, and the real picture appears.

Step 2: Work out your true cost per serve

Almost every margin problem I have unpicked started with a cost figure that was wrong.

Take a worked example. Say a 50 litre keg costs you £145 ex VAT delivered. Fifty litres is around 88 pints in theory. Allow a realistic 5% for line cleaning, sediment, froth and staff pours and you have roughly 84 saleable pints. Your true cost is £145 divided by 84, so £1.73 a pint, not the £1.65 the theoretical yield suggested.

Sell that pint at £5.40. Strip VAT (£5.40 divided by 1.2) and you have £4.50 of net revenue. Gross profit is £4.50 minus £1.73, which is £2.77, giving a GP of 61.6%.

Now do spirits. A 70cl bottle of house gin at £15.50 ex VAT gives 28 measures at 25ml, so 55p a serve. At £4.20 a measure, that is £3.50 net and a GP of around 84%. If you pour 35ml as your house measure, the same bottle gives only 20 serves, so your cost per measure jumps to 78p. Pubs that changed to a 35ml house measure and never repriced are the ones wondering where their spirits margin went.

Wine is the one people get most wrong. A 75cl bottle theoretically gives 4.3 glasses at 175ml, but you get four saleable glasses and a splash. Cost wine on four, not 4.3, or you quietly overstate your GP by around two points a bottle.

Step 3: Build a three-tier ladder

Every category should have a clear ladder: entry, mid and premium. Three options make choosing easy and make trading up feel like a decision rather than an upsell.

Set the mid tier as the one you want to sell, and price the gaps deliberately. If the step from entry to mid is 40p to 60p, most people take it. If it is £1.50, they do not.

Trading a guest from a £4.20 house gin to a £5.60 named gin barely moves your GP percentage, because the better bottle costs more. But the cash margin per serve goes from roughly £2.95 to roughly £3.88. Chase cash margin per serve on trade-ups, not GP percentage. The GP percentage tells you whether a line is healthy. The cash margin tells you what actually lands in the till.

Step 4: Reprice with confidence

Once you know your real costs, reset pricing where the numbers demand it. To get that £1.73 pint from 61.6% to 65% GP, you need a net price of £4.94, which is £5.93 including VAT. Price it at £5.90 and you land at just under 65%.

Do not do this across the board on the same day. Move three or four lines at a time, spaced a fortnight apart, and always move the price at the same moment you change something visible: a new glass, a new tap badge, a new listing on the menu. Price rises land far better when attached to a reason.

Two rules keep the peace. Never move your headline pint and your headline house wine in the same week, because those are the two prices regulars know by heart. And avoid crossing a round-number barrier by a penny: £5.90 to £6.00 feels far bigger to a customer than the 10p it is.

If you are tied and your supplier has just pushed prices up sharply, check where you stand. Under the Pubs Code, a significant increase in the price of tied products is one of the four events that gives a tied tenant of a large pub company the right to request a market rent only offer, and the request must be made in writing within 21 days. Even if you never intend to go free of tie, knowing the clock exists changes the conversation. Our guide to improving your brewery tie deal covers how to use that leverage properly.

Step 5: Fix the pour before you blame the price

Repricing will not rescue a bar that is giving drink away by accident. Spend one week measuring, not guessing.

• Count the measures out of a spirit bottle against what the till says you sold. Free pouring loses more margin than any price list ever recovers.
• Log how much beer goes down the drain at each line clean. Weekly cleaning on eight lines uses real product, and it belongs in your cost per pint.
• Watch how staff pour lager. An extra centimetre of head given away on every pint to avoid a complaint is real money over a weekend.
• Reconcile your till stock report against your physical stocktake monthly, line by line, and investigate anything over 2% variance.

Clean lines matter commercially, not just for compliance. Beer that tastes flat gets left, and the guest orders something else next time. Our cellar management and beer quality guide sets out the routine.

Going from 5% draught waste to 2% on that example keg takes your cost per pint from £1.73 to about £1.69 and adds roughly a point of GP. Note the scale: pour control tidies the edges, pricing and mix do the heavy lifting.

Step 6: Train the team on round crafting

Script three swaps that lift margin, the kind covered in our guide to upselling scripts for bar teams:

• House gin to premium gin, offered as a choice rather than a question: "House gin or the Cotswolds?"
• Standard lager to local craft, sold on the story: "The pale ale is brewed six miles away, want to try a taste?"
• Single to double with a mixer, priced so the double is obviously better value per millilitre.

Practise these daily for one week. Give the team the exact words, listen to a real round being served, and correct gently on the spot. Then track it: compare the house-to-premium spirits split before and after. If the ratio has not moved, the script has not landed, and repeating it louder will not fix a line nobody believes in.

Step 7: Partner with suppliers smartly

Ask for training, point of sale material, glassware or a small activation in return for range commitment. Suppliers want you to sell more and will support if you ask, but you need to bring something to the table: a tap line, a menu listing, a launch event, or shelf position at eye level.

One technical point worth knowing when you negotiate range. Qualifying draught products, meaning drinks under 8.5% ABV supplied in containers of at least 20 litres for dispense, attract a lower rate of alcohol duty than the same liquid in a bottle or can. That is a fair argument to raise when a supplier pushes packaged product at you.

Step 8: Design menus that sell for you

Put premium options where eyes land, following the drinks menu design principles that make people trade up. Use short descriptors of six to ten words. People buy the story as much as the drink.

Practical rules: put the price straight after the description rather than in a right-hand column, because a price column invites people to shop the cheapest line. Drop the pound signs. Put your target mid-tier item at the top of each section, where the eye lands first. Keep each section to five or six choices, because longer lists push guests back to the safe thing they always order.

Build the same ladder into alcohol-free. Low and no carries no alcohol duty, and a driver who currently gets a lime and soda for £1.20 will happily pay £4.50 for a proper alcohol-free beer if you list it like a real drink instead of hiding it under the till.

Common mistakes

• Keeping slow-moving lines because one regular likes them.
• Pricing premium items too low, so the ladder has no top and nobody trades up.
• Relying on staff memory instead of menu cues.
• Costing on theoretical yields rather than what you actually sell.
• Repricing everything on one day and handing regulars an obvious grievance.

Quick checklist

• Twelve weeks of sales data pulled and segmented into three tiers.
• True cost per serve calculated on saleable yield, not theoretical.
• Slow movers removed or replaced.
• Entry, mid and premium ladder visible in every category.
• Team trained on three swaps and the split measured a week later.
• Stock variance under 2% on your monthly count.

Mini FAQ

Will removing products upset regulars? Replace, do not remove. Offer a clear alternative, put a taster in their hand, and explain why the new one is better. The complaints come when a line vanishes with no conversation and no substitute.

How often should I review the mix? Monthly for fast-moving items and anything with a price change from your supplier, quarterly for the full list. Diarise it, because the review that happens when you remember it is the review that never happens. If you want the next layer, our guide to doubling drinks profit without selling more picks up where this one ends.