News from Minnesota Municipal Beverage Association

Minnesota Municipal Beverage Association Newsletter

(November 21, 2010 - November 27, 2010)

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MMBA Website

As I See It...

Percentage

MMBA staff and directors have been extensively traveling the state helping members improve their operations.

One of the primary focus areas has been gross profit percentage (total sales minus cost of sales).

Unfortunately, many managers focus on overall sales and not gross profit.

However, it is not about sales, it is about making money!!! It is better to make more money with less sales than the other way around.

Good gross profit amounts are in the 24%-25% range for off-sale and 42%-45% range for combination facilities.

Cities with relatively low gross profits should consider whether the gross profits reflect their intended mark-up policies.

(Remember, there is a difference between mark-up and gross profit:

Click Here For An Example)

In addition, if gross profits are well below the intended mark-up of inventory, a number of factors can be in play such as theft, poor inventory control, and damage of inventory.

It is also possible there is a shift away from on-sale toward off-sale. Consequently, this shift might require a possible significant change in business strategy.

Is it possible to have a lower gross profit and still make money?

Yes. But the only way to achieve consistent success with this approach is strict control of expenses. A lower gross profit means there is less money to spend on labor etc.

So, check your gross profit and contact MMBA if we can be of any assistance.

Paul Kaspszak

Executive Director

Holiday Gift Baskets

The holiday season has again generated questions to the Alcohol and Gambling Enforcement Division regarding the sale of gift baskets in licensed off-sale liquor establishments. The questions generally consist of what can be included in the baskets and "why can that store sell them and my store can't".

The gift baskets raising concerns are those that contain alcoholic beverage products, typically wine, and items such as cheese, coffee, crackers and breads. The baskets are packaged as a single item and sold to the consumer as such. These types of baskets are prohibited based on Minnesota Statute 340A.412 subdivision 14, which specifically states what items an exclusive liquor store may sell.

340A.412 subd. 14 Exclusive liquor stores.

(a) Except as otherwise provided in this subdivision, an exclusive liquor store may sell only the following items:

(1) alcoholic beverages;

(2) tobacco products;

(3) ice;

(4) beverages for mixing with intoxicating liquor;

(5) soft drinks;

(6) liqueur-filled candies;

(7) food products that contain more than one-half of one percent alcohol by volume;

(8) cork extraction devices;

(9) books and videos on the use of alcoholic beverages;

(10) magazines and other publications published primarily

for information and education on alcoholic beverages; and

(11) home brewing equipment.

Likewise, a grocery store cannot sell a gift basket that contains alcoholic beverages since they would not qualify for an off-sale liquor license. However, there are a very few grocery stores that were granted grandfather status in 1994 and also have an off-sale liquor license in the store. These few stores can sell liquor and grocery items and could legally assemble and sell the multi-item gift baskets, which could include alcoholic beverages. Finally, since 1994, there are no exclusive liquor stores that have been grandfathered in or granted an exemption to Minnesota Statute 340A.412, allowing for the sale of items not provided for by statute.

From everyone at the Alcohol and Gambling Enforcement Division, have a safe and happy holiday season.

Sales Tax on Packaged Ice

At the recent MMBA Regional Meetings, members asked if sales tax should be charged for packaged ice.

According to the Minnesota Department of Revenue:

Generally, food and food ingredients are exempt. "Food and food ingredients" mean substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value.

Certain items, including ice cubes and blocks, are generally exempt. However, if any of these items are prepared by the seller, sold

with eating utensils provided by the seller, or sold through vending machines, they are taxable.

Click Here for Complete Information

Staff Essentials

We do it better

By BarBusinessOwner.com

The following are characteristics you can look for in interviews and during training. People who have these qualities will be a good fit and easier to work with.

If your staff doesn't have these qualities, don't lose hope. You can train employees to adopt these traits so their job is easier and they can deliver better service at your bar.

Ability to Prioritize

Employees should keep in mind that the customer is the most important thing. They should serve their customer first and then take care of washing those glasses or making a run to the storeroom.

When a customer is waiting for service and your employee is wiping down a countertop, the customer notices that they are not your first priority.

If there is something that absolutely has to be done right away, they should first acknowledge the customer, smile and say "I'll be right with you sir/maam." When employees prioritize customer needs first
and take care of guests, customers are happier and gratuities increase.

Friendly and Positive Attitude

Every customer that walks through your door is a guest and employees should welcome them into your bar with a friendly smile and a kind word. A staff that welcomes customers and makes them feel at home
can make all the difference in the bar business.

This stands even if customers aren't friendly back or if they are difficult to deal with.- and complaining about customers should never allowed.

A positive attitude will help when problems arise. Instead of
complaining or giving up, an employee with a positive attitude will think of how to fix the problem and how he/she can do better next time.

Ability to Anticipate Needs

Have you ever waited and waited for your server to refill your drink or bring silverware and napkins to your table? Now think of how pleasing it is when a server brings you exactly what you need before you even ask for it. This is how anticipating customer needs can make a change in your service.

Train employees to bring drink refills, extra napkins, additional plates, etc. at certain intervals so guests never have to ask or wait
for these things. Train them to think of putting themselves into
the customers shoes and anticipate what they would want.

Once your staff gets used to anticipating what guests might need and when they need it, employees can adjust their service depending on the
pacing and needs of each customer.