How a Veteran Operator is Preparing for a Minimum Wage Increase

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Dennis Madden has been the general manager of the Rose & Crown Pub in Calgary, Alberta, Canada, for close to 20 years. As a long-time operator of one of the most consistently busy pubs along the famed 17th Avenue in Calgary, Dennis has seen it all. But as Canada and many states in America are now facing increased minimum wage expenses, he’s had to make some changes to his operation.

In a recent interview for an upcoming hospitality industry podcast (stay tuned!), he shared his thoughts on how he is adapting to the upcoming minimum wage increase to $15 an hour.

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In the old days, a server would be on the floor, and a bartender would be restricted to his wood and the service well. Today, a server is taking the wood, pouring all the drinks, and taking a section of tables. That same server may also act as hostess and seat guests that are coming in the door. As a manager, I am commonly stepping onto the line to help run food, pour drinks, and work in a support role to ensure service does not crash.

Read this: The Implications of Eliminating the Tipped Wage, Part I: A Summary

But this mentality also goes beyond what is purely happening on the floor. Cooks are helping put away liquor orders, shoveling snow, cutting grass, and overall building maintenance. Another example would be that we no longer have a dedicated maintenance person, so now I am going around fixing problems with the infrastructure. Whenever something breaks, I have to get my hands dirty and fix it. Everybody is chipping in wherever they can, and accepting those extra responsibilities as part of the job.

Proper Preparation at Close Reduces Start Times

We used to start servers an hour before their shift so they could prepare for lunch, but there were often times where the atmosphere was a bit too relaxed in the morning and the time was not used optimally. People would come start their shift, chat with their friends, have a smoke, then take their time as they set up. We now start people literally minutes before we open the doors for business, and the only way we can do this while still maintaining our service standards is to prepare the night before for opening the next day.

Read this: The Implications of Eliminating the Tipped Wage, Part II: Server and Manager Attitudes

This seems like a small thing, and some people may dismiss the one-hour setup time as a tiny expense, but when you add it up over the year it makes a big difference. We get our night staff to literally clean and reset the entire floor so it is ready to open at close. This is just a small way I’ve been able to keep my costs in line.

Leading Guest Interactions with a Featured Shot Instead of Giving Away Free Booze

We have features on the weekend for shots at a slightly discounted rate, and we instruct our servers to lead guest interactions by recommending these shots. For instance, we have $5 shots on some nights, and when a table of 10 guests comes in, the servers or myself will try to start them off with this feature. To the guest, $5 for a shot is a steal of a deal, so it is quite an easy sell. The ultimate impact is that after a couple rounds, guests…are now having a good time and more likely to stay.

Read this: The Implications of Eliminating the Tipped Wage, Part III: An Assessment

This is not a new strategy for this industry, as giving away free drinks to keep guests is as old as the industry itself. However, in this era of increased costs, we simply do not have the budget to give away free drinks as a consistent strategy to keep guests in seats. With this suggestive selling strategy, we are still able to make a profit on each shot—albeit smaller than at regular price—and we are able to achieve the same result as giving away free booze, which is ultimately to get people having a good time as fast as possible.

Price Increases

I have bumped up many food and liquor items by a quarter here, fifty cents there, but I’ve been careful not to go too high as we are in the bar district and there are several competitors within walking distance that are selling the same products at similar price points. I haven’t received too much backlash from guests for making the changes that I have, and it is not smart to assume what people can or cannot pay. When most people are partying, if they are having a good time, they will find the money to buy it. I mean, how many times have you or I [partied] and woke up the next day with a credit card bill that we later regretted? It’s important to remember that people have much more purchasing power than we give them credit for. Raising prices was a no-brainer to adapt to our increased labor cost.