Wet vs Dry GP%: What Numbers Should Look Like

Last updated: 24 April 2026

Most new pub licensees assume all gross profit is the same — it isn’t, and that mistake costs thousands in the first year. Your wet sales (drinks) have a completely different margin profile than dry sales (food), and blending them into one number will hide the real health of your business. I’ve personally navigated the NSF audit process at Teal Farm Pub and watched operators make decisions based on total GP% when they should be analysing the two separately — one tells you about pricing power, the other about food cost control. You’ll learn exactly what wet and dry margins should look like in 2026, how to calculate them properly, and why knowing the difference between them is the difference between surviving year one and not. Most importantly, you’ll understand which margin is the real canary in the coal mine for your pub’s financial health.

What Is Wet Sales vs Dry Sales?

Wet sales are drinks — beer, cider, spirits, wine, soft drinks, anything poured at the bar or served in a glass. Dry sales are food — meals, snacks, desserts, anything that comes from a kitchen or is plated. That’s the definition, and it matters because the cost structure of each is fundamentally different.

When you pour a pint of lager under a tied agreement with your pubco, you pay a fixed bottle cost (let’s say £0.45 per pint) and charge a fixed price, often dictated by your pubco’s pricing recommendation. When you sell a fish and chips meal, your costs vary week to week depending on fish supplier prices, potato costs, oil changes, and whether your prep staff wastage is controlled. One is relatively stable, one is volatile.

Your wet sales also include non-alcoholic soft drinks — cola, juice, coffee, tea. These sit alongside alcoholic drinks on your till. For the purposes of margin analysis, they all sit in the wet category because they’re sold the same way, at the same price point, and the customer behaviour is identical (quick transaction, minimal table time, high volume).

Dry sales might include a carvery, a full kitchen menu, bar snacks, or nothing at all if you’re a wet-led pub. The point is: if there’s a kitchen and a food cost, it goes here.

How to Calculate Wet and Dry GP%

Gross profit percentage is simple: (Revenue minus Cost of Goods Sold) divided by Revenue, multiplied by 100. The key is that you must split your EPOS data and your invoices by category, not lump them together.

Here’s the real-world process I use at Teal Farm Pub:

• Wet revenue: Pull your till report for drinks only. At my pub, this includes beer sales, spirits, wine, soft drinks, hot drinks. This number comes straight from your EPOS if you’ve coded items correctly — if you haven’t, your system is already worthless.
• Dry revenue: Pull your till report for food only. Again, your EPOS must have these coded separately or you’re flying blind.
• Wet COGS: Total up every invoice for drinks bought in the period (usually a 4-week trading period). This includes beer, spirits, wine, mixers, soft drinks, coffee, tea — everything liquid that cost you money.
• Dry COGS: Total up every invoice for food suppliers — fish merchant, butcher, veg supplier, bakery, dry goods. Do not include packaging or waitress uniforms — those are overheads, not COGS.
• Calculate: (Wet Revenue − Wet COGS) ÷ Wet Revenue × 100 = Wet GP%. Repeat for dry.

The absolute critical mistake here is that your pubco’s invoices and your personal cash purchases must both be counted. If you’re buying a pallet of lager from your tied supplier and also buying premium spirits on a local cash deal, both belong in your COGS calculation, or the number is useless. Many new operators only count the pubco invoice and ignore cash purchases — that’s how you get a 75% wet margin that feels amazing until you realise you actually lost money because you didn’t account for the cost.

Benchmark Margins for UK Pubs 2026

Right now in 2026, here’s what you should expect for a tied pub under a standard agreement:

Wet (drinks) GP% should sit between 65–75%. At Teal Farm, we run 72% on wet. This accounts for a mix of draught beer (lower margin due to tie obligations), spirits (higher margin), and soft drinks (variable). If your wet margin is below 65%, you’ve got a cost of goods problem — either your supplier is overcharging, you’re underpricing, or you’re losing product to theft or over-pouring. If it’s above 75%, you’re either running a very premium offer or you’re under-costing portions (which catches up with customer perception fast).

For free-of-tie pubs or those with mixed supplier agreements, wet margins can run 75–80% because you have buying power and aren’t locked into expensive tied products. But if you’re under a standard tied pub agreement, assume 65–75%.

Dry (food) GP% should sit between 55–65%. This is wider because food operations vary hugely. A full kitchen with a head chef running a proper menu sits around 60–65%. A bar with pre-made sandwiches and carvery might sit 55–60%. The absolute minimum acceptable dry margin is 50% — below that, you’re barely covering labour to prep and serve the food, plus kitchen running costs.

At Teal Farm, we serve quiz night food, match day burgers, and occasional carvery events. Our dry margin sits around 58%. That’s reasonable for a community pub because food drives footfall rather than profit — people come for the quiz and buy three pints whilst eating a £5 burger. The food isn’t the business, the wet sales are.

A blended GP% (both wet and dry combined) typically sits at 62–68% for a tied community pub with food. But this number masks everything. If your blended GP is 65% and wet is 72% and dry is 50%, you know immediately that your food operation is dragging profit down, and you need to either improve food margins or reduce kitchen hours. If you only know the blended number, you’re operating blind.

Why the Split Matters More Than You Think

Understanding the difference between wet and dry GP% is not accounting navel-gazing — it directly affects every decision you make about your business.

Your pubco’s NSF audit assumes you know these numbers separately. When Marston’s conducted my NSF audit in March 2026, the BDM wanted to see my wet and dry margins as distinct figures. Why? Because they’re checking whether you’re a viable tenant. If your wet margin is collapsing (indicating cost control problems or pricing issues), they want to know. If your dry margin is terrible (indicating food operation problems), they want to know. They don’t care about the blended figure — that’s accountant’s comfort food. They care about diagnostic data.

Your EPOS system tells you what sold — that’s its only job. A best pub EPOS systems guide will help you choose one that codes wet and dry separately from day one. But your EPOS doesn’t tell you whether you made money. That’s why Pub Command Centre exists — to give you real-time visibility of labour costs, VAT liability, and cash position. Without understanding your wet and dry margins, you can’t even begin to assess profit.

Here’s a real scenario: You take on a pub and see the seller’s figures show blended GP% of 67%. You think it’s a decent business. You take it on. By month three, you realise wet margin has dropped to 62% because the previous tenant had a relationship with a cash supplier that gave them 10% discounts — that’s gone now. You also realise dry margin is 48% because nobody’s controlling food waste and your chef is overportioning. The blended figure hid both problems until you were already committed.

If you’d analysed wet and dry separately from the start, you’d have seen the red flags in the P&L and either renegotiated the ingoing or walked away.

How to Improve Each Margin

Wet and dry margins improve through completely different levers. Understanding which is which stops you wasting effort on the wrong one.

Improving Wet Margin

Wet margin improvement is largely about cost control and pricing discipline. You’re tied, so you can’t switch suppliers. What you can do:

• Audit your tied supplier’s invoices. Check that you’re not being overcharged for comparable products. Many tied tenants don’t challenge pricing because they assume it’s fixed — it usually isn’t. One conversation with your BDM can shift your cost base by 2–3%, which moves your entire margin.
• Control pour sizes. A pint should be a pint, not 1.1 pints because your bartender is generous. Over-pouring costs 5–10% of wet sales at many pubs. A simple pour control training program (which takes one afternoon) fixes this.
• Track shrinkage. Breakages, spillage, samples, staff drinks — these all come out of your margin. If your stocktake shows 3% shrinkage and your industry benchmark is 1%, you’ve found £2,000+ of lost margin annually.
• Monitor price positioning. Wet margins improve if customers trade up — if they’re buying larger measures, premium products, or extra rounds. Knowing your local competition’s prices tells you if you’re priced too low or too high.

Improving Dry Margin

Dry margin improvement is about supplier relationships, portion control, and menu discipline.

• Negotiate supplier terms. Unlike wet, you’re not tied on food. Get competitive quotes from at least three suppliers per category. A good fish merchant will often beat the all-in-one food distributor on fish costs by 8–10%.
• Control portions ruthlessly. If your fish and chips costs you £2.40 in raw food and you’re selling it for £9.95, your food cost is 24% and margin is 76%. But if your chef is giving customers an extra £0.50 of fish because he’s generous, your actual cost is £2.90 and margin drops to 71%. Multiply that across 300 portions a week and you’ve lost £10,000 annually from generosity.
• Reduce complexity. A 40-item menu with half the items selling once a week drives waste. A 12-item menu with proper stock rotation drives margin. This is genuinely where dry operations fail — too many items, too much waste.
• Track daily waste. Set a target (typically 2–3% of food cost) and measure actual waste daily. If waste is 5–6%, you’ve got a prep training problem or portion problem to solve immediately.

Common Mistakes Licensees Make

In 15+ years of hospitality, I’ve seen the same financial mistakes repeat. Here are the ones directly connected to wet and dry margins.

Mistake 1: Ignoring the split until the first NSF audit. New operators run their first month or two without separating wet and dry, assuming they’ll sort it out later. By the time they do, the audit’s already due, the BDM’s waiting for numbers, and suddenly they’re scrambling to reconstruct data. If you’re taking on a pub in 2026, set up your wet and dry tracking on day one. Not month two. Day one.

Mistake 2: Assuming food is supposed to make profit. A lot of tied pub operators try to run food as a profit centre. It’s not. Food in a wet-led pub (which most community pubs are) is a footfall driver. You sell a £7 burger at 55% margin to get a customer in the door who then buys three pints at 72% margin. The burger isn’t the profit — the beer is. Once you accept that food’s job is to drive covers, not profit, your whole margin analysis shifts. You stop trying to squeeze 65% margin on food and instead focus on moving volume at 55% whilst protecting your wet margin religiously.

Mistake 3: Not adjusting for seasonality. Your summer margin (higher footfall, faster turnover, less shrinkage) will be better than winter. Comparing a summer month to a winter month and freaking out is pointless. Compare each month to the same month last year, or run a 13-week rolling average.

Mistake 4: Counting the same cost twice. If your pubco sends you an invoice for £500 of beer, that goes in wet COGS. If you also bought £100 of spirits on a cash deal from a local distributor, that also goes in wet COGS. Some operators count the pubco invoice but forget the cash purchases, which makes their margin look better than it actually is. Then, six months in, they realise they’re actually losing money because they didn’t account for half their costs.

Use a spreadsheet, use accounting software, use whatever system makes sense for your pub size — but whatever you use, it must capture every supplier’s cost, not just your pubco’s.

Mistake 5: Comparing your margins to someone else’s. Your mate’s pub two towns over has 78% wet margin because he’s free-of-tie and buys in volume. You’re tied at 70%. That’s not a failure — that’s the cost of the tie. Don’t compare apples to oranges. Compare your wet to your wet (is it stable or declining?), your dry to your dry (is it stable or declining?), and only then compare to the benchmark range for tied pubs.

Frequently Asked Questions

For more information, visit retail partner earnings calculator.