quote:

Originally posted by portsmouth:
A Byron Standard Pinot Noir. $97.00 a bottle. This wine retailed for $17.00 bucks.

Although there is no way I would ever order any wine in a restaurant that is marked up to 5-1/2 times the retail price, this is an example of why I always try to order wine in a restaurant that I have never had before. If I am going to pay through the nose for the wine, it ought to at least be a new experience for me.

I am happy whenever I can find a wine in a restaurant for less than twice retail.

Your posting is the one that makes the most sense out all the postings here on this subject. Most restaurants I eat at follow a very similar pricing strategy. It is a conveinience fee. Not everyone will know ahead of time what bottle to bring with them, unless it is a frequently visited restaurant.
Cheers everyone!

quote:

Originally posted by cuffthis:
Our pricing is as follows:

We take the "retail price" of the wine and add $20 to it. If the "retail price" of the wine is less than $20, we only add $15 to it. For calculation purposes, we assume the "retail price" is 40% above the wholesale cost I can by it for.

For example, a bottle of wine that I pay $10 wholesale for would be listed on our wine list for $29 ($10 + $4 (40%) = $14 retail + $15 restaurant markup).

A bottle of wine that wholesales for $20 would be priced at $48 ($20 + $8 (40%) = $28 retail + $20 restaurant markup).

By using this pricing model, the best values on our wine list are the most expensive ones as they are only $20 above what you would (hypothetically) pay for them at retail. $20 dollars above retail is like a corkage fee.

Granted, most of our wines are priced at $50 and less. This price range allows us to earn a decent but not great margin on our wine. But what is does (by design) is reward those who know, appreciate and order higher end wines. I welcome these customers and want to reward them and have them dine with me instead of at a BYOB.

I really don't understand why everyone keeps bitching about the prices of wine at the restaurants. If you don't like the prices, don't go to the restaurant. Period. No one says the restaurant has to price the wines to make you happy. They price them based on what the general market will bear, in their opinion. What will you do next, complain that you like Bally shoes but they mark them up too much, and you want the local retailer to sell you the shoes at the price you want? If you saw the shoes at a different retailer, are you going to bitch that the local outlet mall store sells the shoes for 40% less than the store at the mall you happen to be in? No. You either pay the price, or you go elsewhere. Do the same with the restaurnats. Pay the mark-up, or pay the corkage, or take your business elsewhere. I choose to take my business to places that charge what I am comfortable with. I don't concern myself with places that charge too much. There are a lot of restaurants in town.

If I lived in a town where there was only one good restaurant, and if they charged too much, I would view this as a business opportunity to open a restaurnat and make some good dough in a very underserved marketplace!

Agreed.

It's funny to read this discussion. I am a consultant to the auto industry. An industry with an admitted image problem. The average profit at window sticker is under 8%, though options have a higher profit margin.

The funny part, customers want to pay $200-300 over cost for a $40,000.00 vehicle, then complain because it cost too much. Yet they'll walk into to Nordstrom and buy a $900.00 suit or a $85.00 golf shirt with 200-300% markup without batting an eye.

I couldn't care less how much you mark up wine, but I'm not coming back if you rip me off. The ultimate marketing cost, spend a bizillion dollars to get them in the door, then rip them off and be surprised when they don't come back. The owner always says the same thing, "but they didn't complain, why didn't they come back." It's usually one of the first things they discuss with their bankruptcy lawyer.

WA Wine,

This is an old discussion - endlessly replayed. Except for CDR11, most of us complain about the charges, however it does boil down to the 'market-rules" - if everyone going to restaurant "a" looked at the wine list, grunted, then said to the wine-waiter - "Your mark-up is too high, I'll eat without wine thank you!" then the price would rapidly fall.

All pigs are cleared for take-off.

Personally my problem is that the vast majority of restaurants don't maintain a cellar-list, of wines carefully chosen to compliment their food. No, they have a "wine list" which is prepared for them by their distributor. The wines are landed by the week and it is rare for them to carry stock for more than a month. Compare this to the retail store who have a mark up of, say, 40% - usually for a very, very much wider selection.

I do really object then to the 200% mark-ups on cost under these conditons. On the other hand, the restaurant (and there are many), that cellars wine, is entitled to a return on investment. Most busineses work on an EBITDA of 20 to 25% on funds employed. Therefore this would appear to be reasonable for the restaurant as well - 25% on funds employed every year (compound) plus standard margin.



I came across a realistic restaurant the other day - their policy is this,

1. No BYO if it is on their list.
2. If you bring a cask - the corkage is $60.
3. If you bring a bottle <$10, the corkage is $25.
4. A bottle $10 - $20 retail the corkage is $15.
5 > $20, then the corkage is $7 a bottle
6. If you bring an old wine or a really special wine (Ch. Mouton ...)
no corkage - the wine is a compliment to the restaurant.


Edited - the spell-checker on this site is woeful.

esplanade, v. to attempt an explanation while drunk.

quote:

It's not a case of the percent of markup dammit! It's a case of the amount of markup. If a steak costs $10 and it's marked up to $20 thats a $10 markup.

If the wine costs $20 and it's marked up to $60 that's a frigging $40 profit.

I couldn't care less if the markup on a Coke is $2, but I'm not buying one for $42.

Makes no sense. So, you only care about dollar amount mark up - not percentage. So a $100 wine marked up to $175 on a wine list is not a better deal than a $20 wine selling for $60?

I guess you're not buying a lot of things in this world with that line of thinking. Cars, Stereo's, Vinyl Siding and thousands of other things are marked up in "dollar amount" a lot more than wine.

There has to be a percentage markup. The investment by the restaurant means that they have either a capital amount that would otherwise being gaining interest or they would be paying interest on a loan, both of which will be percentage rates. A fully costed bottle of wine would take into account the cost of the initial bottle, cost of holding plus overheads.

Spreading the cost of the overheads by actual number of bottles would be unusual, most would spread by the cost of the bottle, so another percentage cost.

I like the add 40% on wholesale + corkage fee idea though. That would suit me down to the ground.