Some friends from out of town were visiting for the weekend, and one of them noticed this article in the WSJ, (by Lettie Teague), and brought it to me asking how it is that as the owner of a winery, I never seem to make any money!
I then gave him a crash course the the economics of a boutique winery, which ended with an “Oh” . on his part. I guess that was a partial admission that restaurant wine prices are not my fault, totally.
I also thought the final comment in the article was interesting, where the “customer” became “Mad at Wine” for the restaurant markups. .
I enjoyed the article. Nothing new to me, but I shared it with my adult son and daughter. I think they now have a better understanding why I like to bring wine to restaurants.
If I’m playing her percentages, my $35 Carlisle, $60 EMH, or $150 Schrader is a $120, $250, or $600 retail bottle on a restaurant list.
Mr. Stuckey has changed his wine pricing structure over the years. For several years, he charged only $20 over the retail price of the wine on every bottle on his list. But it didn’t make a lot of fiscal sense, and worse, no one even seemed to notice they were getting a great deal—neither customers nor reviewers
Something I had suspected regarding restaurant pricing. If the customers don’t notice the ‘deal’, what’s the sense it giving one? It’s unfortunate for the few of us who are actually looking for a well-priced wine.
What a grotesque example of “journalism”! First, Consumers pay dollars, not percentages. A $40 markup (but 400% of wholesale) on a Coudert Fleurie bothers me much less than a $400 markup (but 300% of wholesale) on on a burgundy with a $200 wholesale price ( so a retail of $300 to $350) that is priced at $600 on a restaurant list.
She ignores that lower priced wines tend to be marked up more than more expensive wines for the same reason, that is, so that there is meaningful profit on each bottle, and pillories restaurants with well-chosen lists of inexpensive wines based on percentages, not dollars.
A little diligence would have been nice as well, as the online list at The Mark, a Jean-Georges restaurant, shows 2010 Coudert Tardive for $85, which is a considerably higher percentage markup than the one Teague decries at Montmartre for the regular cuvée. But Sun gave her good quotes, so heaven forbid she criticize his lists.
Restaurant pricing deaervea to be put under the spotlight, but not with shoddy, hack journalism like this article.
After looking at the list at Montmartre, I have to add that a restaurant with a fairly well chosen list, all of which are under $100/bottle, seems like a horrible example to use as a restaurant with excessive markups. This is the type of list that should be encouraged, not attacked. I would love to see her friend’s assessment of the lists at J-G restaurants to see if he is equally outraged.
Mike, I can agree with your 2 main points, but this was still a good summary of wine lists in restaurants. And nothing we haven’t already discussed on this board. Wine programs in restaurants are not created for wine enthusiasts. As long as the number of expense accounts and wine-ignorant customers exceed customers with basic wine knowledge, restaurants have no incentive to change their high markups.
True dat! I regularly dine at a local steakhouse that showcases Silver Oak on a table as you walk in. Bring your own and share with the Somm…chances are your corkage won’t show up on your bill. Works for me…sometimes.
Yeah, totally agree. For a restaurant paying NY rent, they just can’t do a 2.5 or 3x mark-up on $13 wholesale wines and make enough money to pay the rent. Where I live, we have the luxury of not paying NY rents, but many places have shit lists at 4x mark-ups.
Just what we needed, another rant about restaurant wine pricing. I agree that it’s a huge miss to not mention progressive pricing (more expensive bottles marked up a lower %).
I do think this part is interesting for a couple of reasons:
For several years, he charged only $20 over the retail price of the wine on every bottle on his list. But it didn’t make a lot of fiscal sense, and worse, no one even seemed to notice they were getting a great deal
I agree with Todd about the second point, but I think it’s as important to notice the first. Those around here who never seem to accept restaurant wine pricing (probably none of whom have firsthand experience with what it takes to be profitable in that sector) might take notice that she is saying here that a retail+$20 pricing scheme was not sustainably profitable for Stuckey.
I do applaud those restaurants that have some hidden deals in there for the few people who notice.
I read that also and found it an interesting way to justify their excessive markups on wine. I know the restaurant business is a tough one, I have friends that own them, but over pricing wine is a short sighted way to do things. However, I can’t control it so I will continue to walk in with my own bottles, which are expensive enough, and gladly pay corkage.
Huh??? Frasca has an “excessive markup” on their wine?? That’s certainly not been my observation.
I have, of course, followed Frasca from the very start. Their $20+retail price was something I noticed (didn’t know what his exact policy was) when I
observed some of the high-end btls seemed relative bargains to what I’d expect in a restaurant. But I’d never bought any of those high-end btls
because the Frasca wine list is exceptional & I’ve always been able to find something good/very good in the $40-$80 price range. And the quality
of the low-end wines are amazingly good.
Tom
Well, that’s partly true, but there are NY retailers who face higher costs (including rent) who seem to manage to thrive selling wine at competitive retail prices. Also, as you say, there are plenty of restaurants elsewhere throughout the country that charge 3x to 4x mark-ups on their wine list.
From my perspective, it’s largely an issue of lack of competitive pressures and lack of competitive information. Wine retailers know that savvy consumers have access to winesearcher.com or other tools to compare their prices. By contrast, restaurants often don’t put their wine lists online (or if they do, they might not post prices). And diners (except for the truly winegeeky) tend not to pull out their smartphones at dinner to compare the price of a wine on a restaurant list to retail. And certainly, there’s no easy way to compare wine prices across restaurant lists.
Restaurants have diners who are essentially a captive audience when it comes to ordering wine. So if you’re paying $10 more to buy Silver Oak Cabernet at Restaurant A vs. Restaurant B, more diners won’t notice or change their behavior.
In this market, the markup tends to drop off considerably for more expensive bottles, but you definitely have to watch out for the “usual suspects.”
As an example, one of the better wine lists around here is at a mom and pop steakhouse that does a fantastic job. The Phelps Insignia and Opus One are easily $100 over retail at $275-300 on the list, but the (slightly) lesser known Merryvale Profile is only $175, which is about $20 over retail in the local market. The 08’ Profile was fantastic BTW.
For those looking for a great list and prices check out Pearl and Ash. I haven’t made it there yet (despite numerous recommendations from friends) but the list looks great.
The volume at a retail shop is much more than a restaurant and the staffing costs are much less. As it so happens, I own a piece of both a retail shop and a restaurant and the fixed + labor costs of the restaurant is more than an order of magnitude more (10x) than the retail shop. (Keep in mind, neither are in NY or are large operations.)
We take a larger margin on the low end (or else it wouldn’t be worth doing) and less on the high end (where there are some real bargains) because what really matters is cash flow.
At the retail level, we take a straight mark-up and discount by quantity, just like everyone else.
I think if your prices aren’t fair, people won’t buy wine. That is a particularly tricky problem in our state because it is COD, so we have to turn inventory fast.
I just have started refusing to buy wine at restaurants. I don’t complain about their pricing, I just don’t contribute by paying massive markups. I don’t find value in buying a $90 list wine that I can find for $30 at Total Wine. What’s the point? I’d only be buying that wine because I didn’t want to pay $150 for something I’d heard of or had enjoyed in the past. Then it comes time to tip after the meal. I feel I’m being fleeced again because it’s not like that $150 required and extra care than the $90. To the dismay of resturant owners, and servers, I’m byob or nothing.
Just because one outfit that you have been following from the start and that I have never been to or heard of, has good prices doesn’t prove a thing.
I rarely go to dinner without bringing wine, I live in California and know what a bottle of let’s say, Williams-Selyem costs, and won’t pay a triple markup on it. Like someone said, I don’t complain to anyone I just don’t buy their wine, I have been asked by the owner on one occasion, and I was honest with her about my thoughts on the wine prices. However that was just my opinion and nothing changed. I do buy wines on some lists that are 50-100, but they are mostly French wines honestly and the only reason to do that a lot of times is to try the wine. Again one restaurant with good prices doesn’t prove a damned thing.
Hmmmmm…not sure I follow your point here, Darren. I read your post as asserting Frasca had an “excessive markup”. I don’t really think that’s the
case and stated otherwise. Not sure that I was trying to “prove” anything other than Frasca’s markup is not excessive.
If you assume that all restaurants have “excessive markup” (i.e. cost more than retail) and prefer to BYOB to avoid their “excessive markups”…that’s great.
But in some states (NM & CO included), BYOB & paying a corkage is not a (legal) option. So we’re stuck w/ buying wine from the restaurant’s wine list
and paying their “excessive markups”. Channeling GeorgeOrwell…some markups are more excessive than others. The point of Lettie’s article.
If you’ve not heard of Frasca…you should remedy that next time (if ever) you’re in CO. It is truly one of the great Italian restaurants in the
USofA. Worth the journey. They focus on the cusine of Friuli and do it very/very well. It’s one of the reasons that winemakers of Italian varietals
in Calif regard it as a coup to get their wine on Bobby’s list. Even better is to be invited to do a winemaker event there. They also have an adjacent
PizzeriaLocale that has some of the greatest pizzas I’ve had in the USofA. Check 'em out: http://www.frascafoodandwine.com
And a block down the street is “Cure”…one of the best salami & cheese shops in all CO as well. And a few blocks away is TheBoulderWineMerchant…
one of the best wine shops in CO. For some reason, probably because of Frasca, there is an unusual concentration of Italian wine importers in CO/Denver area.
Only place, as far as I know, you can find the wines of EmilioBulfon.
I’ve rambled on way too long.
Tom
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