Why GP% Matters in the Pub Industry
Running a pub isn’t easy. Between rising supplier costs, staffing challenges, energy bills and keeping customers happy, margins can quickly get squeezed. That’s why one of the most important numbers every pub owner should keep an eye on is their Gross Profit Percentage (GP%).
What is GP%?
In simple terms, GP% is the difference between your sales and the direct cost of the products you sell (drinks, food, snacks) expressed as a percentage. If you sell a pint for £5, and it costs you £1.50 to buy, your GP on that pint is £3.50. That’s a 70% GP.
Why is GP% so important for pubs?
- It tells you if your pricing is right If your GP% is too low, you might not be charging enough to cover your costs or you might be buying stock too expensively. Either way, it’s a warning sign.
- It helps spot issues quickly. Dropping GP% could mean wastage, free drinks not being tracked, overpouring, or even theft. Tracking it regularly helps you stay on top of problems before they get out of hand.
- It shows the health of your business. Pubs live and die by their margins. Even if sales look good, if GP% is slipping, profitability can disappear fast. Keeping it in line protects the bottom line.
- It helps with better decision-making. Want to run a drinks promotion? Thinking about adding food to the menu? Looking at changing suppliers? Knowing your GP% means you can make informed decisions and protect your profits.
The benchmarks
In the pub trade, typical GP% targets are:
- Drinks: 65–75%
- Food: 55–65%
If you’re outside those ranges, it’s worth digging deeper.
Our advice at AB Accountancy
At AB Accountancy, we help pub owners to track GP% monthly not just annually. By doing this, you’ll know if your pub is operating profitably today, not just when the year-end accounts land on your desk. We’ve seen time and again that pubs who keep on top of their GP% are the ones who weather tough trading conditions best and come out stronger.
If you run a pub and want help understanding your GP%, or simply want to know how your margins compare to industry standards, let’s talk. It could make all the difference to your bottom line.
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