3 Ways to Save Money at the Bar

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Going out to sports bars, dive bars, and nightclubs is a common occurrence for many Americans. Recent estimates indicate that around 20 million Americans visited a bar, nightclub, or casino within the past year. Some night-lifers pick their favorite bar and visit that specific business on a regular basis, while others hang out at a different bar from week to week or month to month. Although these bars are hangouts, they are also places of business, and their goal is ultimately to earn revenue and generate profits. Data from IBISWorld indicates the bar business in the U.S. employs roughly 370,000 people and brings in annual revenues of $24 billion.

Bar owners and managers calculate drink costs, overhead, and labor, and all of those costs are factored into every drink you purchase. The price of your Grey Goose and tonic is a strategic one: it’s priced high enough to cover the bar’s costs and earn the establishment some money, but generally not too high that you’re  unwilling to pay. Beer is the most commonly purchased beverage at bars, accounting for around four-fifths of drink volume. A beer that costs an establishment pennies can come with a price of a few dollars in some bars and more than $12 in others, depending on demand and how much patrons are willing to pay.

A recent Food Service Warehouse blog post outlined information on how bars price alcoholic beverages. If you order a regular Cosmopolitan, the bar prices your cocktail like this:

  • 1.5 ounces vodka = $1.20
  • .5 ounce Cointreau = 70 cents
  • 1.5 ounces cranberry juice = 12 cents
  • Squeeze of lime = 5 cents
  • Lime zest, garnish = 5 cents
  • Recipe total: $2.12
  • Ideal beverage cost: 20 percent
  • Math: $2.12 x 5 = $10.60
  • Menu price: $10.60

Because you’re paying about five times the price of the ingredients, a few hours out at a bar can quickly empty your pockets. There are, however, a few measures you can take to lower your costs. Using a recent Bankrate publication, combined with supplemental information from industry insiders, we’ve come up with a few tips that will help reduce your chances of emptying your wallet during a night out.

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