Particularly when it comes to the dubious information regarding secondhand smoke and the need for smoking bans. Well, kids, I hate to tell you this, but year-on-year sales numbers don't lie.
Keegan's Pub opened three and one-half years ago in the revitalized Old St. Anthony area of Minneapolis. For three years we met our financial projections before every level of government stepped in to put an end to it.The Federal government forced the State to give us .08
The State government forced us to give a pay increase to our bartenders and servers, our highest paid employees.
Hennepin County gave us the smoking ban.
Minneapolis gave us a smoking ban and more costly and restrictive parking for our customers.
Now Hennepin County can recognize the economic hardship it has caused and act on it. Please do so!
For the first three months of 2005, our sales were up 8% over the same months in 2004. For the most recent three months our sales are down 7.5% compared to the same months in 2004. That is a swing of 15.5%. Although our percentage decrease is smaller than some, it represents the difference between profit and loss. We have not had a profitable month since April, and the trend is downward. October 2005 was 17% down from October 2004. Cold weather will only accelerate the trend as smokers will be less willing to smoke outside. Hence, they will go to locations where they can smoke inside.
{...}One final thought: The argument that non smokers will flock to our restaurants now that we are non smoking is totally bogus. Where are they?{...}
Just in case you're not familiar with the restaurant/bar biz, they make most of their money on liquor sales. The typical profit margin for liquor is, generally speaking, through the roof. That bottle of wine you purchased at the liquor store for $25.00? Well, the restaurant purchased the same bottle wholesale for $8.00---they'll charge $9.00 a glass and will get three and a half glasses out of that bottle. They made $23.50 in profit. One would hope that you're asking yourself, "where's the catch?" Well, here it is: liquor profits pretty much float everything else that's sold in a restaurant or a bar. Food sales aren't, generally speaking, all that profitable. The bottom line is quite clear: if you want a profitable restaurant, you want people to drink. It's pretty damn simple. That three hundred percent markup on booze has to pay the rest of the costs. Like labor. Someone has to pour that wine, after all. The industry average for labor is right around forty percent, and it is, generally speaking, the largest cost. Forty percent of that $23.50 is $9.40, which leaves you $14.10 for things like glassware, tables and chairs, food and liquor costs, rent, and of course, taxes. and there's not going to be that much left over, after that's all said and done. This, of course, is grossly simplified and it's just late enough that I'm not sure I'm doing the math properly, but I'm sure you get where I'm going with all of this.
This is why most bars and restaurants fail within the first year of operation. The margins are razor thin. And when sales of your most profitable item are down because the smokers, the people who buy that very profitable item, are going elsewhere, you'd better realize the jig is going to be up very very soon. 17%, kids. SEVENTEEN FREAKIN' PERCENT. That's huge. If I was still in the restaurant biz and I was the one who was facing those year-to year numbers, I'd be having a heartattack right about now.
Just go ahead and try and tell me the smoking ban isn't hurting bars and restaurants.
St. Anthony Main---where Keegan's is located---when I first moved to Cities, was a dump. The husband and I were down in that neck of the woods recently, and we commented that the only thing that used to be in that neighborhood, besides crack houses, was Surdyks. People have worked very hard and it is now a very nice, interesting part of the downtown Minneapolis scene. I would hate to see all of that progress just die because of the smoking ban.
If you're inclined to act, email the Hennepin County Board of Commisioners at
board.clerk@co.hennepin.mn.us
AMEN.
It is amazing to me the places that have become "dead" zones downtown.
I truly believe the bars are going to be able to show the downturn. If they are seeing these types of numbers in the Summer, when people WILL go outside, it's only going to kill them in the winter.....
That's just my two bits.
Posted by: MR. H at November 17, 2005 08:20 PMSo, Kathy, when are you going to venture down to Keegan's on a Thursday night to take part in the trivia challenge and try to put a little margin back into Terry's pockets?
Posted by: Night Writer at November 18, 2005 12:08 AM