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The New Jersey Licensed Beverage Association, Inc.

 

“Representing the on-premise licensed beverage retailers, the heart of the hospitality industry”

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President’s Message
By Melvin Gitler

 

VALUE TO OUR CUSTOMERS

Despite the recent slowing in sales growth, New Jersey bar and restaurant owners say they are trying not only to figure out the economy’s unpredictability, but also to find ways to embrace the challenges associated with it and still succeeds in business.

Talking to people in the industry big and small I have learned that we must all understand the economy. With the economy, comes all issues such as the housing slump and rising gas prices, and we at the same time are trying to give value back to the customers, the best we can.

That value boils down to and comes in the form of limited time offers, increased hours of operation, better service and new product innovation.

You are going to see a lot on innovation in the near future. You’ve got to introduce new products so that the customers come back. And if you do not give great service you may not make it.

This year costs will rise approximately 1-2 percent and sell prices must rise 3 percent to offset losses from your pocket. One thing we must understand about our business is that we are not discounters, and that we are value players. Increase in sales recently is because of increased hours and price increases. These two areas go hand and hand.
We can not be afraid of price increases. We as an industry have been very slow in passing on these increases to the customer. Gas pricing is a perfect example. The consumer was screaming when prices broke the 3 Dollar range and now they are use to it. It won’t be long till gas breaks 4 Dollars a gallon and the consumer will scream and then get use to it. It is the same in our business. If a bottle of beer goes up 60 cents a case that cost must be passed along. That is money out of the owner’s paycheck. If the cost of electricity goes up the consumer does not see that cost and how it affects you but when the bottle of beer goes up 60 cents a case the consumer will see that new number in the store understanding why your price does not go up.

Prices never seem to go down in our industry. Liquor and beer are items that throughout the history have had constant increases. Those increases are no longer able to be absorbed by the bar and restaurant owner. I am not sure this trend can continue at this pace but nothing goes up forever and the near costs for our products will increase but in the long term they will level off.


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