A restaurant that knows what they’re doing can successfully utilize price discrimination in their business model as part of maximizing profit. I don’t see a problem with that at all. But really, with most of the restaurants we’re talking about, if you asked the owners they’d have no f’ing clue what price discrimination is. They’re doing ‘monkey see, monkey do’ and taking a square peg from one person’s business model and trying to shove it into their round hole.
A lot of this bitching is from restauranteurs who are clueless and frustrated. Their mark-ups are too high for their customers. They don’t know why their wine sales are so poor, so they lash out at whatever target presents itself. That’s easier than introspection, right?
… and, when all is said and done (and, boy, is a lot said here about restaurant wine pricing), the comment above is THE (and the only) answer…
Or, in other words, as the end of the punch line to an old joke goes, “… because they can …”
For anyone who has a decent cellar at home, bringing wine and paying corkage (where allowed) is almost always such a better deal that I can’t imagine why you would choose not to.
Very well said. Remember it is every restaurants right to charge whatever they want. It is their business. Just don’t complain when not enough people patronize your restaurant and you go out of business. That is the nature of pure competition. There will always be someone else who thinks they can do it better than you.
I doubt unimaginative restaurateurs are the cause of high markups, it’s more likely that the business earns a higher profit that way. The price of wine in a restaurant must be relatively inelastic. I’ll look over a winelist on the web and if I don’t like the prices I’ll go somewhere else.
The guy that posted that funny comment on Eater is probably getting ready to post again.
This time he’ll add a link to this thread and write “See? What’d I tell ya.”
I am with Mr. Gelb on this. It’s a privilege not a right.
Having operated and worked in many restaurants I can tell you costs are higher than you would imagine. A decently sized list is a lot of money just sitting in inventory and breakage can be quite high (glasses, returned bottles, theft, etc.). Some distributors would not take back bad bottles and you wind up eating that cost. In most any restaurant the margin on food is low. All the money is made in beverages and it’s highest on alcohol. You may only order Ice-tea because you are pissed but that ice-tea only cost a few pennies so it’s pure profit. I am not making excuses or justifying the prices restaurants charge (I often think they are too high), just saying there is more to it than what you might first think.
Just for grins, I selected a few wines and decided to peruse Houston area wine lists. I picked a dozen that I see with some frequency and it turned out that 3 were found on six of the ten lists I pulled. The first two are wines that I don’t drink but have used as price markers to quickly gauge a list for pricing. The price in parentheses is the Cellartracker value.
2009 Orin Swift Prisoner ($33.62) - $49, 52, 57, 69, 70, 99 ($66 avg.)
2008 Silver Oak Alexander Valley Cabernet ($58.92) - $79, 118, 125, 125, 147, 155 ($124.83 avg.)
While there are going to be some variables, these restaurants would be getting the wines from the same wholesaler, have similar labor costs, and would be attracting the same diners. After reading the commentary in this thread, I don’t know what to think. There are some great deals and some way over the top. Not being ITB but still understanding profit margins, the wide variance in pricing is not easily explainable/justifiable. The concept of asymmetric information at least is a way of rationalizing the disparity.
I am glad we have a small (and increasing) number of restauranteurs in Houston who are aggressive with their wine pricing. As a result, I frequent these and avoid the ones who think that they can get away with charging $95 for a 2010 Mer Soleil Silver that’s on sale for $17.99 my local Kroger. I know it is hard to change when you have had a pricing model for a number of years, but a having a significant number of new restaurants open with smartly priced wine lists, maybe the impetus is there. We can hope.
Again, the restaurant’s problems making money are not my problem as a diner. As with paying taxes, it’s my fiscal obligation to find the least expensive way of navigating a good meal. It’s a degenerate situation now where the vast majority of diners lose out on a decent wine experience because the place is relying on price-insensitive whales for profits. Instead, just increase menu item prices by 10% for everyone and charge fairly for wine.
Does a restaurant prefer an empty table or a table with customers who order a bunch of food and tip well but either order no drinks or just some beers/sodas? Assuming for purposes of the answer that they are among the vast percentage of restaurants who aren’t at capacity at all times (or if they are now, they will not always remain so)…
I guess I have always assumed the latter but based on the hostility of so many owners/somms, who knows, I could be wrong.
Maybe they have the mistaken perspective that (1) someone who brings a bottle of wine will still come to the restaurant at all if they are not able to bring or are charged a high corkage as opposed to finding an alternative (easy to find good alternatives to all but a few places around the country) and (2) someone who brings a bottle of wine is someone who would have otherwise bought a bottle of wine (and even perhaps one close in type to what they brought) and so “lost” them a lot of profit by going BYO with corkage than without (plenty of people I see in restaurants don’t drink alcohol or have 1-2 beers, mixed drink or glasses of wine - even people who love wine don’t drink every night necessarily and not sure about other cities but I cannot say I see many bottles of wine on tables at most Chicago restaurants that I go to).
At which point every customer pitches a bitch over rising entree prices and dines elsewhere. As opposed to the current situation, where a few highly knowledgeable wine people that make up a small minority of restaurant guests and would be inclined to bring their own wine (no matter what was on the list) feel alienated. Sorry, but most people on this board would bitch about selection (with rare exceptions) if they were suddenly satisfied on price - I know I would and, since you’ve made your general contempt for restaurant wine professionals obvious in this thread, I doubt very much if prices dropped you’d suddenly be less inclined to want to BYOB.
Most people have a vastly different definition of a decent wine experience than you, or I, do. Many diners are excited to see Conundrum or Orin Swift, and could care less what they would pay for them in a retail shop. You’re asking the vast majority of diners to subsidize your experience, and I doubt they are interested in doing so. Most restaurants don’t see us as a target market, and they’re not wrong. There are only so many wine geeks, and many, many casual, wealthy diners.
@Nick, it is not at all like paying taxes. It is not one’s “fiscal obligation” to rent seek and hire legal talent to engage in technically legal shenanigans because you think you are above the law, as a job creator and such. (I’m not saying Nick actually has this attitude; I am merely mocking the ridiculous comparison he made with some big picture political snark.)
@jcoley, @gene: I suppose restaurants are smart to market to the many casual, wealthy diners. They are also smart to market to wine geeks to whom the casual, wealthy diners call on for recommendations. It is also smart to segment your market, allowing clueless people with money to pay 3x+ retail and wine geeks paying corkage to coexist in your restaurant. If you can’t make profit off a table of wine geeks, who are almost always food geeks, then your restaurant deserves to fail.
PS: although packaged in an amusing rant, it is never pretty to see someone in the higher end restaurant or hospitality business have contempt for those customers who know enough to tell the difference between mediocrity and excellence.
Do you honestly believe that, Rick? The insurance alone for a restaurant serving alcohol versus a retail wine store is significant. Not to mention stemware which is a huge cost in places serving in Riedel or the like. Breakage, cleaning, polishing, etc. is not cheap.
I agree. I ran the wine program at an ex-WS Grand Award winner for several years, and one of the first things I fought for with the GM and chef/owner was to allow me to make judgment calls on what was at the time illegal - corkage for wine people. Every person who asked to bring a bottle in was basically asking me to risk the livelihood of every person who worked in the restaurant, and they (with one or two exceptions) recognized it as a privilege and not an entitlement.
I had an extensive wine list that I was very proud of, and also aware that there were bottles I would never be able to put on the list, and if someone wanted our food with that wine they owned, I would try to make it happen. That latter guest was rare in comparison to the table that was stoked to find Maybach, Carter or Paul Hobbs To-Kalon (at fair mark-ups) and never thought twice about price. That the ratio was so heavily tilted towards the latter was surprising at first…
Bullcrap. We’re not talking McDonalds vs. Burger King or even yahoo Italian eatery #1 vs. yahoo Italian eatery #2 that people drag the kids to every Thursday evening. If they can hire a Somm, they are an event restaurant that the average upper-middle-class diner like me can afford to visit maybe every month or two months; their reliable customers will NOT be sensitive to a 10% fluctuation in price. There’s a local steakhouse everyone in my area is familiar with that falls in this category; they are so astoundingly reliable I’d pay 50% more if they charged it. And they are packed every night of the week; but their wine list is still grossly overpriced.
More bullcrap. I make it a point to browse the winelist at every place I BYOB to. I WANT to give my business to a restaurant willing to price fairly. Maybe 1/5th of the time I will actually find a good deal and take my BYOB home unopened at the end of the night.
So if we’re not an $800-hour lawyer we hoi polloi don’t deserve to drink good wine. Even if we could appreciate it, which we likely can’t. Thanks for clearing that up.
![[bow.gif]](/uploads/db3686/original/2X/3/34fe6dfbb5b9ca18529c11cea0b49f72cb1f17d5.gif "bow"){kind=small}
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Market to your large target market or a small sub section?