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Three Reasons Why a Hotel Should Engage External Stocktakers

Historically, liquor only stocktaking was seen as an essential within the Pub Co sector yet liquor and food stocktaking has increasingly become an accepted necessity.

Stocktaking is the act of producing full stock results which include reports on actual versus estimated margin, liquor stock surpluses and shortages as well as yield (plus a myriad of other important data relating to performance).

As more and more pubs are becoming food led, demand for food stocktaking has increased at the same rate. Most Pub Co’s either have their own internal stocktaking/audit departments or they choose to outsource to independent service providers. Yet the hotel sector have never placed quite as much importance on liquor and food stock control and currently only 39% of hotel liquor stocktakes are completed by external providers, most are conducted by hotel staff.

Quite often these stocktakes are simply a stock on hand valuation to produce the monthly P&L’s. What is strange is that hotel operators, both individual and corporate, are generally happy (or rather in ignorant bliss) with the monthly margins being produced, and have no real idea what their actual achievable margins should be. Herein lies our first reason why hotels should employ external stocktakers.


Reason 1 – Margin improvement

Hotels who engage independent stocktakers producing detailed stock results every month, typically see at least three percent added to their margin. This occurs because that stocktaker will help you to realise what your potential margin can and should be, and then works with you to improve your margin via improved stock control and analysis.

So how can a 3% margin improvement be achieved?


Hotels are starting to understand yield as an important control aspect in analysing and improving margins because, ultimately, it is yield that puts more money into the bank.

To clarify, yield is worked out based on full potential margin at full bar tariff price before any allowances or discounts are taken into account.

So if you sell everything at full bar tariff price, you do not discount, do not have any waste and your stock result is spot on, your yield will be 100%.

Variance Reports

Stock reports should include variance reports. These reports help you to pinpoint where stock losses are occurring and allow you to identify losses on individual products. Any advice your stocktaker provides regarding variance reports is vital to reducing losses. For example large losses on draught beer may be down to excessive wastage. Losses on wines can be down to staff training. Losses across the board may be theft or lack of controls, revenue capture anomolies, functions or wedding packages etc.

Liquor Stockholding

Your hotels stock report should also advise on liquor stockholding. We recommend this should be between 26 – 30 days. Having full, independent, monthly stocktakes will highlight high stock holding and a detailed line by line product report will assist in identifying which products to reduce stockholding of.

Your independent stocktaker should also highlight products that are out of date or getting close to their best before date. Consolidated stockholding reports, such as those Venners offer to corporate hotel clients, further highlight best/worst performing. We suggest creating a league table to be used at regional/national meetings. Name and shame!


Reason two – So what about food stocktaking for hotels?

Generally in the hotel sector, there is (and has always been) low demand for Food stocktaking and we cannot understand why. Less than 20% of Venners hotel stocktaking clients have food stocks as well as monthly liquor stocks. In fact some hotel companies have no food stocktaking at all, only ever producing monthly margins for their P&L based on purchases versus revenue.

However times are changing and hoteliers are waking up to the fact that having regular external food stocktaking will improve performance in much the same way as liquor stocktaking. Quite often chefs blame allocation of breakfast or day delegate revenue to food as an excuse for poor margins. This problem can be overcome by completing daily food snapshot results for breakfast or day delegate menus which produces an actual (not estimated) average margin both before and after wastage has been taken into account. This will then prove that allocations are correct, or need to be revisited by the hotel. This can also be benchmarked against other hotels within a group.


Reason three – time vs cost x quality

Balance the cost of outsourcing stocktaking against the reduction in management time spent having it done internally. Always factor in how well an external supplier would do it versus how badly some of your untrained site staff might do it. And think about whether your own staff would be able to help you achieve a 3% margin improvement. Normally such improvements eclipse the cost of outsourcing, which reminds me of that much-shared motivational business quote

“If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.”

In some companies stocktaking is seen by staff as a monthly chore that nobody really wants to do, especially on the Monday morning following month end. An external stocktaker will proudly walk into your hotel, ready and willing to provide stocktaking services. They’ll be keen to produce your results and happy to sit and talk you through the minutiae, helping you to analyse what’s happening and how to put it right.


So, for many reasons it makes financial sense to get a reputable stocktaking company to complete stocktakes at your hotel – giving you that independent overview of hotel food and beverage performance, as well as action plans to reduce shrinkage, reduce stock holding and improve margins.

So, what are you waiting for? Call Synergy Stocktaking today!