Yep. Regular customers are your bread and butter, so a fun environment that people want to come back to is job one. As someone who’s worked in bars, people are more likely to come in when there’s more people in there. The more fun it is, the longer they’ll stay and the more they’ll come back.
I agree that filling the place up is important, even if you’re not making a ton of profit on each body. If you have surveyed your market right, you will become the go-to wine hangout, making it natural for people to return to your store to buy more, even when they don’t stop in to drink. If the extra $5 is going to put people off of this kind of atmosphere, then it’s not worth it if you can possibly swing it financially.
But it HAS to pencil out. Being the fun, cool place to hang out and losing money on every one of those people means it’s not worth it. The margin HAS to cover expenses and leave a profit.
You don’t think it’s worth it, even if they break even?
Way too much reality in that statement for me. Note the “ex” in my sig. Traffic was the biggest problem as the economy tanked deeper and deeper. They always say you have to spend money to make money, but the view of that from the bottom of the barrel is different.
I don’t see it as an either or situation. The people that will grab a bottle will almost always be people who have done the flight or had a glass pour and they would like to share a bottle afterwards. This is fine by me. The other possible instance is a regular customer who arranges with me prior to open a specific bottle for a friend that they are bringing to the shop for the first time. It is these kinds of situations that are more the norm. So the bar does pencil out for me. 95% of people who come to the bar buy something.
It depends on what you have for a wine bar. If you’re talking about a few stools and a counter with some Reidel Vinum Chiantis, meh. If you’re talking about a significant area that can seat 10-15 people with tables, perhaps some food, etc, that’s different. The former imposes little cost - but read above and you’ll see that some people try to do a wine bar as a real place, sometimes with food, varying glassware, etc. That has a different cost structure and retail margins might not cover it adequately.
That’s why there’s not one right answer aside from"Do what’s right for your business." The example above of the wine shop ownwer who can barely afford to pay herself is a clear either/or - she’s not running it as a business and should make some tough choices. You might be in a different situation.
No. Because breaking even usually means you’re losing money in reality. It usually means someone (often the owner) isn’t getting paid as well as they should and it leaves you with no cushion in the bank for bad months or years. Businsses that don’t make a profit or make a very small profit usually aren’t businesses for long (read Marc Hanes’ first post above).
Now, we might be talking about different things, but to me a product’s margin has to cover salaries, rent, inventory carrying costs, cost of sales (marketing - yellow pages, website, newsletter, etc), operational stuff like the phones… and it should leave some money in the bank for bad times, to purchase some wine deal if one comes up (this last is influenced by WA being a cash and carry state - no credit terms in the wine biz), etc.
If a shop breaks even on the bottle that someone is drinking - that is if the bottle cost you $10, sells for $15 in the shop and it costs you $5 in s to have that person drink there (factoring in the per sf rent, etc) then you’ve LOST money - you’d be better off not having the wine bar space and selling them that bottle to take home. And if they’d not have bought that bottle? Well if you made nothing by selling it… who cares?
There are obvious soft benefits - increased traffic, being the shop people go to for more of their wine purchases, etc. So for some people it may well make sense. But not always - if you’re the only wine shop in the area for example, increases in sales might be minimal.
It also depends on what you provide - a comfy place with some nice furniture, Overture glasses and music? Much different than a mini-restaurant with a selection of cheeses and finger foods and glassware to match the various wine types.
I tend to agree with this sentiment. However, one does have to allow for the “enjoy what you do” factor and sort of enter that into the equation. Without speaking for Jeff, he seems to really enjoy what he does and, perhaps, is willing to earn less sheer monetary profit, taking non-monetary compensation, etc. That’s why a lot of people get into and/or stay in the wine business.
That said, yup, there are soooo many different costs that slip through the cracks when running the numbers that breaking even in Peachtree does not mean you broke even in reality. Stated profit in a small business is, I assume, usually greater than in actuality. Many people do things like buy stuff for the store on their personal credit cards and pay themselves back later (without interest, etc.) or drive their personal cars to get store supplies and never take gas money from the register. These are costs which almost never get factored in. If someone was hyper-diligent about capturing these costs the picture would probably be less sunny.
Anyway, as the discussion notes, each individual wine bar/store has a different physical configuration as well as customer demographic. As a result, the topic probably has to stay broad without too, too many direct comparisons. What works for X may not work for Y and vice versa.
As much as I do love what I am doing, I don’t just “give away the farm.” My margins at the bar are far superior to normal retail margins with the focused flights. And my small choice of glass pours (to limit my risk) are also substantially higher than retail margins. So in the end my numbers work. And, as Marc and others point out, every business is different. I think that is what makes it intriguing. There is the variation, the constant think-on-your-feet, and paying attention to all of the details that make the learning experience so inspiring (at least for me).
The Wine Room in Winter Park Florida pissed me off. This a retail and wine shop combination.
They have the machines which you can buy 1-2oz pours to “test taste” the various wines. Hell they even have Opus One and Shafer on tap. After spending between $3-4 per test tasting on half dozen wines, I finally figured out which Pinot to pop there. I take my bottle up to the counter to pay for it, and they inform me its another $10 per bottle to pop it in the store. 
Pretty sure this was the look on my face - ![[blink.gif]](/uploads/db3686/original/2X/1/10e99773136c8c7c26d8a4f3ea716e27704e295a.gif "blink"){kind=small}
I told the guy, thanks but no thanks. I proceeded to tell him nicely ![[swearing.gif]](/uploads/db3686/original/2X/8/8a0d3f3461d40641d294442fc2be78039bf94d19.gif "[swearing.gif]"){kind=small}
how much that $23 bottle ended up costing me, and that I wouldn’t be buying anything. I have no problems paying for a cork fee had I not spend all the money testing them first.
That is my only corkage rant when it comes to a shop/bar combinations.
I suppose there are always different ways to look at the same thing, but I would hope a shop that invested the kindof money those machines cost would be sophisticated enough to figure out they should comp the corkage or at least give you credit for the tastes, and how to do it. On the other hand, lots of people use the machines just to drink, so it’s a decision the shop has to make.
As I said up-topic, my experience was that the retail environment ultimately pre-determines the reference point of most customers. To you it was a retail store… period. In my area most of the hybrid models have come to that conclusion and adjusted how they charge. The problem for many of them is that the demand is sometimes greater for their winebar side and the retail reference keeps them from using all the margin builders they could use if they didn’t have it. The early-on belief that you could maximize both sides just hasn’t worked out as planned. I wish I’d had the benefit of the last three years or so when I began in '06. Things would have been a lot less difficult.