A Case Study
The Challenge
One of the most common assumptions in hospitality is that the greatest risks sit in the busiest trading periods.
In a pub and restaurant operation we supported, regular stocktakes were identifying losses of around 10% of takings at a single site. The scale of the issue was significant, but what concerned the client most was not just the loss itself, it was the lack of explanation behind it.
From their perspective, the operation appeared well controlled. Management presence was strongest during peak trading sessions, and those periods were assumed to carry the highest level of risk. Quieter trading periods were seen as lower priority, with less focus given to oversight and control.
On the surface, the logic made sense.
What We Found
A detailed review of trading patterns and stock performance suggested a different picture.
When we observed activity across the full trading day, it became clear that the issue did not sit within the busiest periods at all. Instead, it was concentrated in the quieter “early doors” session.
During these periods, actual bar activity was not aligned with reported sales. The discrepancy was not obvious when looking at headline figures, but became clear when viewed in the context of timing, behaviour and control.
This was the key issue.
The business had focused its attention on the periods it believed carried the most risk. In doing so, it had overlooked the periods where controls were lighter, scrutiny was reduced, and unusual patterns were less likely to be challenged.
The Approach
Rather than focusing solely on overall variance, the analysis shifted to understanding when and where discrepancies were occurring.
This included:
- Reviewing trading patterns across different dayparts
- Comparing activity levels with recorded sales
- Observing operational behaviour during lower-pressure periods
- Identifying where control processes were less consistently applied
The objective was simple: move beyond assumptions and use data and observation to pinpoint the true source of the issue.
The Outcome
Once the issue was identified, the business was able to take targeted action.
Controls were strengthened during quieter trading periods, management oversight was adjusted, and expectations around process consistency were reset across the full day, not just peak sessions.
As a result:
- Stock losses were reduced
- Visibility improved across all trading periods
- Management gained a clearer understanding of where risk actually sat within the operation
Most importantly, the business moved from assumption-based control to evidence-based decision making.
A Wider Lesson
This case highlights a broader reality across hospitality operations.
Losses are not always driven by high-volume pressure points. In many cases, they sit in lower-profile periods where scrutiny is reduced and controls are less consistently applied.
Focusing only on where activity is highest can create blind spots.
Strong operators look beyond where the pressure is. They look at where assumptions are being made, because that is often where the real risk sits.
Call to Action
If your stock results are showing unexplained losses, the issue may not be where you expect it to be.
Capcon works with hospitality operators to identify hidden risk, strengthen controls and improve performance across all trading periods. Contact us to arrange a review.
