Shop the Competition— Macro-Economics Approach to
On-Premise Success

BAR GURU RICK Sandvik has had his thumb pressed firmly on the pulse of the industry for the past 30 years. To succeed in this down-turned economy he says necessitates owners and managers regularly assess the ever-shifting marketplace from the consumers’ point of view.

“It never ceases to amaze me when I’m seated at a client’s bar and it’s readily apparent that the patrons know more about what the competition is doing than the management does. The one constant in this business is that people have to pass a lot of your direct competitors before they reach your front door. You better be absolutely certain that there’s always a good reason for them to do so.”

The mastermind behind the Precision Pour control spouts, Sandvik advocates independent operators shop the competition in much the same manner as the multiunit chains do—with one significant difference. While national accounts typically hire outside firms to conduct market research on their behalf, smaller businesses rarely have the budget for that type of expenditure. He advises a more cost-effective alternative.

“Market research is nothing more than a logically organized survey of the marketplace. Don’t send other people to gather these insights for you. While second-hand information may be useful, garnering it on your own is invaluable.”

Specifically, you’re looking for information about such things as drink pricing, well liquor selection, portioning and the types of drinks they’re promoting. For example, are your competitors offering similar drinks as yours at lower prices, better drinks at similar prices, both or neither?

Street savvy operators routinely hit the road and shop the competition. They go out, spend some money, make friends, and in a relatively short amount of time, gather a wealth of information about the marketplace. They often drum up business for themselves in the process.

Sandvik suggests there are some basic guidelines or rules of conduct that should be followed. Don’t be covert. When appropriate to do so, introduce yourself to the server, bartender or the manager and let them know you own the establishment down the road.

“Remember, you’re there to have a drink or two, eat some appetizers and enjoy the ambiance of the place,” says Sandvik. “Be warm, open and upbeat. Equally important, don’t over-imbibe and always leave a generous tip. The server or bartender waiting on you today may be in your place tomorrow applying for a job. So make a good impression.”

 

 

THINGS TO LOOK FOR

ALL ESTABLISHMENTS OPERATE with market advantages and disadvantages. The key is to accentuate   your   strengths    and  

diminish   the impact of the perceived weaknesses. To that end, there is a number of operational features to take note of when shopping the competition.
• PRODUCT — What products do they carry that you don’t? What quality grade of liquor do they carry in the well? Do they stock an extensive line of super-premium spirits, such as cognacs, single malt Scotches, single barrel bourbons, or 100% agave tequilas? What beers do they offer on draft? How many labels of beer do they carry? Do they have a good selection of micro-brews in the bottle? What is their house wine? Do they offer varietal wines by-the-glass?
• PRICING — How do your competitors prices compare to yours? What do they charge for a well highball, such as a gin and tonic or Scotch and soda? What are their call and premium prices? Do they market a wide array of house specialty drinks and what price range? Is the place known for any particular signature drink? What products are on special during happy hour and what do they charge? What are their regular import bottle and draft prices? How much is a glass of house wine?
• MARKETING — What type of happy hour promotions do they run? Do they use bar menus to promote their house specialty drinks and bar appetizers? Do they have a wine by the glass program? Does the staff up-sell or use suggestive selling techniques? Do they serve food at the bar?
• PORTIONING AND GLASSWARE — What size drinks do they serve? What’s their shot size? How do they portion liquor — shot glasses, free pour, control spouts or electronic liquor dispensers? Do they offer more than one serving size of draft beer? What size is their wine serving?
• STAFF — How does their staff compare with yours? Do they seem better trained or more proficient? Do they seemingly have better attitudes when they’re working? Do they conduct themselves more professionally?
• AMBIANCE — What type of background music do they play? What kind of atmosphere does it help to create? What mood does the lighting set?
• ENTERTAINMENT — What promotions do your competitors run and how do they advertise them? Do the place feature dancing? What other types of entertainment are offered — pool tables, coin-op machines, kareoke?

After you've seen the sights and taken all the field trips you need to, Sandvik advises giving thought to what market advantages you enjoy over the competition and what advantages they have over you. Once you gain insight into that it’s mostly clear sailing from there on out.

 

---

 

SUCCEEDING AT THE POINT OF POUR

 

SINCE NO BAR or restaurant operates under the burden of too much profit, effective portioning controls are a must. It’s challenging for a business to remain in the black when the staff is playing fast and loose with the inventory. Regardless of whether bartenders are over-pouring measurements, giving liquor away, selling it and pocketing the cash or drinking it themselves, the financial impact on the bar is the same.

A low-cost, low-tech means of ensuring accurate portioning is to outfit the bar with control pour spouts. Industry leader Precision Pours are now used in over 40,000 bars in the U.S. and abroad. These innovative devices rely on a patented ball bearing assembly to immediately stop the flow of liquor at the prescribed measure. They all but eliminate under-pouring or over-pouring liquor and are effective in deterring illicit practices behind the bar. Since they function like conventional spouts, they don’t impede speed of service and don’t require staff training to achieve optimum results. The spouts are available in seven portion sizes ranging from 5/8-ounce to 1 1/2-ounces.

Precision Pours are as fast as free-pouring without the attendant worries and expense. As is true with any system, the control function of the devices can be subverted. Fortunately, removing the spout from the bottle prior to pouring is a tad obvious. —RP