Agree, Increasing food and staffing costs are really squeezing restaurants; they’re closing on the daily here unfortunately.
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That was mentioned in the Mobley article - that (some) restaurants are not making money on food and are relying on wine markups.
“Red wine sales are tanking worldwide”
FIFY
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Ah, it’s probably not as swanky as many SF joints and their presentation is very basic but they have real deal fish. Their prices, I am assuming, will take you by surprise in a good way! I have an employee (2 actually) that live about 2 blocks away from there and they have a hard time not going all the time.
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I’d bet more than 25% of tables are without wine. I’ve posted elsewhere of top restaurants in NYC being 85% without wine some nights. The shift to whites makes sense as well: cheaper.
I personally see no reason to pay 2.0x markup or more for wine in a restaurant… and 4.0x is absurd. If someone else is paying or a corporate card is in play…sure.
Given the market seems to be agreeing at this moment in time, I think it is only matter of time before wine prices correct (as markets are efficient over the longterm).
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I agree with others. We only go to a Michelin starred restaurant at most 2-3 times a year. When you are paying 200-300 per person for a 1 star, and up to 500 per person for a 2 or 3 star, I’m not in the mood to buy a young wine with a 3-4x markup.
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My wife and I live in SF and this article really hits home.
2 examples from the last weeks.
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I convinced my wife to do takeout instead of going to dinner because I wanted to enjoy our wines and not pay $75+ corkage fee.
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We are going to Napa next week for 5 nights. For the first time ever, I’m bringing 6-8 bottles of wine with us instead of buying bottles (we found restaurants that have $25 corkage). In our case, this is partially about cost, but primarily driven by the fact that our wine consumption has plummeted in the last 18 months while my purchasing has NOT! We are completely out of room and thus we need to be drinking our 1,000 bottle collection versus paying 4x markup to drink stuff we’ve never tried before.
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You’re generous. 1.5x is more than plenty for a decent bottle. 4x on Caymus I gladly applaud.
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the markups are one thing but the lack of depth (even among restaurants in europe) is far more disenchanting. opening a wine list used to be a magical treasure hunt and a somewhat motivational influence behind visiting restaurants. currently you can find far more interesting wines with age at retail than on many lists even at top tier restaurants.
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Agreed! I’m sick of seeing Barolos with 3 years of age on them and $200 price point
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While auction prices in general seem to be holding decently well along with retail wine sales, here in Texas there is much talk of restaurant business being sharply down and especially wine in restaurants.
Anecdotally, I am seeing it even at places that prepare and sell food to go- not fast food restaurants, but a couple of steps up from that. Prices have risen dramatically since COVID, and in the major cities in particular housing costs are getting incredibly high- not just ownership but property tax assessments have been aggressively hiked in the past 2 years in the top neighborhoods around here.
In contrast to 2008/2009 it is a slow and painful squeeze that I only see getting worse.
For those who cellar wine offsite- there has been for years a growing trend of storage facilities that offer lounges for tastings, kitchen facilities and even organized member BYO events. That is where I and many of my friends here in DFW do much of our wine consumption now outside of private home gatherings. One more strike against restaurants.
If there is an easy answer to this for the restaurant business, I do not have it. At a 50,000 foot level I see the beginnings of the world adapting to a more realistic long term interest rate outlook than has been the case for much of the past 20 years. And in the interim that includes a lot of personal de-leveraging, in a sense. A big part of that is the food budget- with Dallas being a place where eating out is incredibly expensive compared to cooking at home.
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This is also a big issue here in DFW. I can be understanding about wine markups when a restaurant is taking a cash flow hit in order to maintain an interesting list of wines that have some age on them, but such lists are few and far between these days.
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You folks raise a lot of important issues (for wine lovers, anyway). The pricing problem ignores some old economic axioms. The one that comes to mind first is that sales usually increase on most goods when they are offered for sale at lower prices. Wine is no exception. Too many restaurants are focusing on the $/B rather than on the total revenue for the wine program. I fondly recall a rstaurant that I grew to adore because the owner took a flat dollar amount on every bottle - independent of sticker price. His cellar turnover was exceptional and his selection was worrthy of a trip. The concept came crashing down when the building he was in was sold. Boy, do I miss him!! BYO has to be in the new equation for restaurants to survive. I am more understanding of the crazier pricing when traffic is high, but a rainy week-day night? Really!? Remember, most of these folks are food/wine people not business school graduates. As an old time retail consultant I can recall our first question to the merchant was: WHat do you love more - the merchandise or the customer?? A lot of would-be fancy restaurants are still hugging their bottles, especially red ones. Think about this - 8 years ago I bought a very highly regarded CA Pinot Noir for $50. Today’s marketprice (on line) is $125. If a restaurant picks any of it up, they are likely to charge $300 - $400/B. I can assure you my wife and I do not do a lot of $600 dinner outings. Worse, we won’t drink plonk in a effort to be thrifty. The restaurant trade will either get real, or they will get gone. Sad.
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Part 2 - I forgot to mention that the restaurant with the fixed wine fee was completely full EVERY night and emptied his cellar at record speed. Distributors loved him because they knew he could quickly sell any good wine they offered him which resulted in a better list at better prices than any of his competitors. It didn’t hurt that he was a talented chef.
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I think you touch on why the restaurant pricing is so high. Restaurants want to make their profit on Friday and Saturdays nights when it’s tough to get a reservation. Cocktails and beer have high margins without the inventory costs.
Who goes out on a Tuesday night to an expensive restaurant?
People at conferences, ppl in NYC.
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We bought a bottle of Mugneret Gibourg at Smyth this year, it was maybe 1.5x retail, which we thought was pretty good.
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How about a good BYO policy for M-Th nights (at least)??
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Yeah, but no longer enough $.
Depends on margins on food. They really need to sell inventory, so discounts would be better. I suppose restaurants are afraid of looking like hotels, airlines, or UBER with peak pricing.