Five Numbers Worth Watching — And What Good Looks Like

Hospitality produces more data than anyone can read. The EPOS records every sale, suppliers send invoices weekly, payroll tracks hours, and the stocktake adds a valuation and a margin on top.

Five of those numbers will tell you most of what you need. Here they are, with what to compare them against — because a measure with no benchmark is just a number on a page.

1. Gross profit, read as a series

A GP of 70% is neither good nor bad on its own. A GP of 70% after three periods at 74, 73 and 72 is a business losing a point a period, and that is the most useful sentence a stocktake can produce.

Single results are weather. Series are climate.

2. Stockholding, measured in weeks

"£20,000 of stock" means nothing without knowing how fast it sells. Expressed as weeks of cover it becomes a decision: how much working capital is standing in the cellar, and how much of it is standing still.

Too little and you run out on a Saturday. Too much and you have bought next month's problem early.

3. Variance, per product rather than overall

An overall variance of 1% can hide one line at 15%. The headline figure tells you whether to worry; the product detail tells you where to look.

A variance is not an accusation. It is the gap between what the till says happened and what the stock says happened, and it has a dozen innocent explanations before it has a guilty one.

4. Purchases against sales

Sales can be strong while stock quietly builds. Comparing what went in against what went out over several periods catches ordering drifting out of step with trade — usually long before the stockholding figure looks alarming.

Allow for the obvious: a Christmas buy-in, a supplier deal, a beer festival.

5. Product mix

Not every pound of sales carries the same margin. When GP moves and purchasing has not, the mix is the first place to look — and it is the measure most often missing from a stock report altogether.

They only work together

Any one of these can mislead on its own. GP has dropped — did purchasing change, or did the mix? Stock has risen — did sales rise with it? Variance has widened — did the team change?

That last question is the one people forget to ask, and it is often the answer.

If your stocktake report gives you a valuation and a GP and stops, ask for the other three. They are in the data already; it is a question of whether anyone has put them in front of you.

Hospitality Counts.