Sunday, September 13, 2009

Restaurant Wine Lists

One of the retailing come-ons that drives me out of my mind, is the 80% off sale. Don't tell me the savings, just tell me the cost. I'll figure out if the price is a good price. The restaurant business, with huge competition, and an economy driven loss of customers, is desperately trying to arrive at winning formulas. Half price night, re-theming restaurants to more modest venues, pre-fixe menus, restaurant week, restaurant month, restaurant year....Whatever makes them come in the door. The fact is there is a dwindling population of customers walking in the door, and a supply of more restaurants needing to make a living, than there is a demand of customers.

I work with restaurants to develop wine programs. The wine list, which is developed to be in harmony with the menu; is a reflection of pricing strategies, and business outlook. Wine programs take their direction from the menu. All factors; kitchen design, decor, service, and service style, table settings, uniforms, pricing, and the beverage program; are set in motion by the menu. So, in these economic times what is the best outlook for a wine program? The simple and most direct answer is the same answer I would give at better economic times; great selections at fair prices. Great selections and fair pricing is relative, kind of like Supreme Court Justice Potter Stewart's famous description of pornography, "I'll know it when I see it."

The wine magazines and blogs are packed with rightful indignation of customers and reviewers who feel ripped off by restaurants that mark up their wines three and four times the original cost.
High end restaurants defend their pricing structure to speak of the cost of better glassware, larger staffs, and in most cases a higher cost of real estate. The question is how much extra profit seems fair without alienating their clientele? While the high end restaurants wrestle with this dilemma, they have incorporated other strategies to continue to mark up wines at a rate that would upset their clientele, if their clientele were aware. Wines by the keg, private labels, exorbinate mark up on wines-by-the-glass, obscure labels that have limited access to retailers, are all part of their effort to continue to maximize profits.

A healthy restaurant does not want to advertise a fire sale on their menu or wine list. A consistent, long term approach toward respectful mark ups develops a respectful long term approach from their customers. I am always amazed by restaurateurs that use a formulaic approach to hit a food & beverage cost percentage, rather than make a fair dollar amount, item by item. I believe they either don't believe their customers can tell the difference, or they have made a business plan that is not realistic. Both ways, there is a groundswell of resentment at the industry for gouging on wine lists, and the people know it when they see it.