Reading a Pub P&L in the UK

Last updated: 11 April 2026

Most pub landlords hand their P&L statement to their accountant and never look at it again until tax time. That’s a mistake that costs thousands every year. Your profit and loss statement isn’t some abstract accounting document—it’s a real-time map of where your money is going and where you’re bleeding cash. The difference between a pub that thrives and one that struggles often comes down to understanding these numbers well enough to spot problems before they become crises. In this guide, I’ll walk you through every line of a typical pub P&L so you can read one confidently, understand what’s actually happening in your business, and make decisions that protect your margin.

What Is a Pub P&L Statement?

A P&L statement is a monthly or annual snapshot of your pub’s revenue minus all costs, showing exactly how much profit (or loss) your business made in that period. It’s also called an income statement or profit and loss account. Every pound of sales goes into that statement, and every pound of expense comes out of it. What’s left is your profit—or your loss.

The P&L is different from a balance sheet (which shows what you own and owe) or a cash flow forecast (which shows when money actually moves). Your accountant produces your P&L, usually monthly for the first year of trading and then quarterly or annually depending on your business size. But here’s the operator insight nobody tells you: waiting for your accountant to produce a P&L six weeks after the month ends is too slow. By then you’ve already made decisions based on incomplete information. The best-run pubs I’ve worked with run a basic P&L every week—even if it’s just a simple spreadsheet pulling data from their till and stock counts—so they can spot cost drift in real time.

When I was evaluating EPOS systems for Teal Farm Pub in Washington, Tyne & Wear, one of the key criteria was whether the system could produce a weekly profit snapshot, not just daily till totals. Most EPOS platforms give you sales data instantly, but pulling accurate labour costs and stock figures usually requires manual entry. That gap between what you know and what you can prove is where profit gets lost.

How a Pub P&L Is Structured

A pub P&L follows the same structure every time:

• Total Revenue (also called turnover or sales) — everything you took in
• Less: Cost of Goods Sold (COGS) — the cost of stock you sold (drinks, food, coffee)
• Equals: Gross Profit — what’s left after paying for stock
• Less: Operating Expenses — labour, rent, utilities, insurance, everything else
• Equals: Net Profit (or EBIT) — your actual profit before tax and any finance charges

Each of these sections breaks down further. Your accountant will provide line-by-line detail. But this layering approach is crucial: it lets you see where margin is lost at each stage. A pub making £15,000 in revenue looks healthy until you realise it cost £9,000 to buy the stock (60% COGS instead of the expected 35%), and then another £8,000 in labour costs. That leaves barely £200 profit on the month.

The golden rule: every section of your P&L should be measured against your budget and against the same period last year. A line item only matters if it’s different from what you expected or planned.

Understanding Revenue and Sales

Revenue sits at the top of your P&L. It’s the total money that came in from customers during the period. In a pub, this typically breaks down into:

• Wet sales (drinks: draught, bottled, spirits)
• Food sales (meals, bar snacks, specials)
• Other income (quiz machine splits, room hire, card machine fees refunded, or sometimes minus card fees)

Your EPOS till system or accountancy software should give you wet and food sales separately. This matters because they have very different margins. Draught beer typically has a 65–70% gross profit margin (you sell it for £5, the stock cost you £1.50). A plate of fish and chips might only have 50–55% gross profit because the ingredients cost more relative to the selling price.

If your pub runs quiz nights or sports events like Teal Farm does, pay attention to whether ancillary income (quiz machine, room hire, event fees) is being recorded properly. It’s easy to miss small revenue streams when you’re focusing on bar sales.

One thing many licensees miss: revenue on your P&L should match the cash and card totals from your till. If it doesn’t, you have a recording problem or a theft problem. Run pub profit margin calculator tools alongside your monthly accounts to verify the maths yourself, rather than assuming your accountant has caught every discrepancy.

Cost of Goods Sold (COGS)

COGS is the cost of stock you actually sold during the period. It’s not what you bought—it’s what left your cellar and was sold to customers. This is why pub operators need accurate stock counts and a reliable cellar management system.

The formula is:

• Opening stock (value at start of month)
• Plus: Stock purchased (invoices)
• Minus: Closing stock (value at end of month)
• Equals: Cost of goods sold

If you don’t do monthly stock counts, you’re blind to where your COGS really is. I’ve seen pubs with estimated COGS of 30% discover through a proper count that it’s actually 42% because of untracked wastage, freepours, and spillage. That’s a £1,800 swing on a pub doing £10,000 monthly revenue.

When selecting an EPOS system for a community pub handling wet sales, dry sales, quiz nights, and match day events simultaneously, the real cost isn’t the monthly fee—it’s the staff training time and the lost sales during the first two weeks of use. But what justified the investment was built-in stock management integration. Kitchen display screens save more money in a busy pub than any other single feature because they reduce kitchen waste and speed up ticket completion, which in turn reduces reheats and complimentary items.

Your COGS line should typically be:

• 35–40% for wet-led pubs (drinks-focused)
• 45–55% for food-led pubs (food-focused)
• 40–50% for mixed pubs (wet and food balanced)

If your COGS is higher, investigate wastage, pilferage, or incorrect portion control first. If it’s lower, check that stock counts are being done honestly and that freepours aren’t being given away without recording.

Operating Expenses and Overheads

This is the second-largest expense bucket for most pubs, after COGS. Operating expenses include:

• Labour costs — wages, employers’ NI, pension contributions, training
• Rent and rates — if you’re a tenant or leaseholder
• Utilities — gas, electricity, water
• Insurance — public liability, employers’ liability, stock
• Maintenance and repairs — cellar cleaning, equipment fixes, building upkeep
• Professional fees — accountant, solicitor, bookkeeper
• Marketing and promotions — social media ads, leaflets, sponsorships
• Consumables — glasses, paper towels, cleaning supplies, till rolls
• Finance costs — if you have a loan or overdraft facility
• Depreciation — equipment written down over time (non-cash cost)

Labour is usually the biggest line item. In my experience managing 17 staff across front of house and kitchen at peak times, labour should sit between 25–30% of revenue for a well-staffed, well-organised pub. If you’re hitting 35%+, either your sales are lower than they should be, or you’re overstaffed. If you’re below 20%, check that you’re not under-recording hours or relying on unpaid owners’ time.

Use pub staffing cost calculator tools to model different shift patterns and head counts, so you can see how payroll changes affect overall profit before you make rota changes.

Rent and rates are fixed costs that don’t change with your sales, which is why pubs in expensive locations often struggle if footfall drops. If you’re tied to a pubco, check your lease carefully. Some pubco agreements tie your rent to turnover (a tie clause), which means higher sales automatically cost you more in rent. Free-of-tie pubs have completely different economics because rent doesn’t fluctuate—but free of tie pub UK options often come with less support from the pubco.

Utilities are the next easiest line to control. Pub temperature control systems and LED lighting upgrades often pay for themselves within 12 months through lower bills. Maintenance and repairs are harder to forecast—a broken cooler or failed heating system can blow the budget—which is why many pubs maintain a separate maintenance reserve.

Interpreting Profit and Margins

Once you’ve subtracted all your costs from revenue, what’s left is your net profit. But the raw number isn’t as useful as expressing it as a percentage of revenue—your profit margin.

A net profit margin of 10% is considered healthy for a well-run pub. That means for every £100 of sales, £10 is profit. A 5% margin is tight but survivable. Below 5%, you’re operating on a knife edge—one bad month, one equipment failure, or one drop in footfall and you’re into loss.

Pubs with strong gross margins (65–70% on drinks) often struggle because operating expenses are fixed and eating into that margin too quickly. You can have great margins on your stock and still make no profit if your labour costs are too high or your rent is too steep.

This is why the pub drink pricing calculator matters. A 5p price increase on a pint sounds tiny but compounds into real money across a year and across all your products. Similarly, a small reduction in labour hours (say, 2 fewer staff shifts per week) can swing a break-even month into a profitable one.

Benchmarking your margins against industry standards is useful, but your own trend over time matters more. If your margin dropped from 12% last year to 8% this year, something changed—either your mix shifted (more food, less drinks), your costs rose, or your prices didn’t keep up with inflation. Investigate.

Reading a Real Pub P&L

Let’s walk through a realistic example. Here’s a simplified monthly P&L for a medium-sized wet-led pub:

• Revenue: £18,500 (80% draught, 20% food/soft)
• Cost of stock: £6,300 (34% COGS—good for wet-led)
• Gross profit: £12,200 (66%)
• Labour: £4,400 (24%—excellent)
• Rent: £1,500 (fixed)
• Utilities: £650
• Insurance: £400
• Maintenance: £200
• Consumables: £300
• Marketing: £150
• Professional fees: £300
• Total operating expenses: £7,900 (43% of revenue)
• Net profit: £4,300 (23% margin)

This pub is healthy. Gross margin is strong, labour is controlled, and net margin is excellent. But now imagine the same pub with one change: labour rises to £5,500 (30%) because of absent staff not being replaced. Now:

• Gross profit: £12,200
• Labour: £5,500
• Other expenses: £6,400 (unchanged)
• Net profit: £3,300 (18% margin)

That’s a £1,000 swing from a single cost line rising. Over a year, that’s £12,000 in lost profit. This is why monthly P&Ls matter. If you’re running weekly till reports but not checking labour and stock against budget, you’re only seeing half the picture.

When reviewing your P&L, always ask:

• Is this line higher or lower than last month? Why?
• Is it higher or lower than the same month last year? (Seasonal patterns matter)
• Is it higher or lower than my budget? By how much?
• If it’s worse, what action am I taking this month to fix it?

The pub landlord who knows their P&L intimately—not just the bottom line, but the drivers behind each number—is the one who spots problems early and stays profitable through downturns.

SmartPubTools currently has 847 active users running pubs across the UK, and the most common feedback we get is that pub operators struggle to reconcile their EPOS till data with their monthly accounts. Discrepancies emerge because till data doesn’t always capture stock movements, comps, or cash reconciliation errors. Pub IT solutions guide resources can help bridge that gap, but the responsibility to verify starts with you reading your P&L line by line and asking questions.