Perlis Picks a Pricing Policy
Recently, I wrote an article about restaurant corkage policies, and reader Cathy Martin raised an issue that I did not address. Her comment related to: if restaurants were reasonable in their wine pricing, corkage would not be necessary.
I understand what she is saying, even though from my own perspective I’m not sure how much it would matter as we like to bring our own wine to restaurants, based on the wines we have collected in our cellar.
That being said, I have seen too many mundane wine lists, with a large number of wines that essentially qualify as “supermarket wines” priced at two to three times retail. And while many people do not terribly care what is on the wine list and are only looking for a beverage to accompany their dinner [and there is nothing inherently wrong with that], I am assuming that Eve Wine 101ers do care, and are looking for a special wine experience at a reasonably affordable price.
Now there are plenty of restaurants that put a lot of time and effort into their wine lists, and that should be worth something, especially those that try to differentiate their selection or put a little age on their bottles – the accountant in me looks at the time value of money and can appreciate that. And having proper stemware costs money too. But lots of restaurants, without in-house wine expertise, rely on their distributors’ advice to price at industry standard – double retail or triple wholesale – regardless of the quality or uniqueness of the list, and the consumer experience suffers.
A great example to me is Las Vegas. Las Vegas might contain the single most concentrated collection of great restaurants with great wine lists than anywhere else. But, wine prices can be astronomical, and corkage inquiries get mixed results. (Many say corkage is illegal, some quote corkage prices all over the map, and at least one says it is free [thank you Pinot Brasserie at the Venetian which I highly recommend, not just for the free corkage but also for the great food and service].)
But, the restaurant that rises above all this is Marche Bacchus, in Summerlin [a suburb of Las Vegas]. Great food, great service, and it has its own retail wine store attached to it. The selection is awesome, lots of wines that I have spent a lot of time gaining access to [eg. Biale, Turley, Carlisle] as well as wines that were new to me, such as the excellent Lillian Syrah. Pricing in the retail store seems to be pretty much standard retail, with occasional really good markdowns, and, as I said above, a really awesome selection. But the really cool part is when you want to bring the wine to your table, it just costs an additional $10. So, restaurant pricing is retail + $10, plus you get the fun of browsing the great selection. And, from my observation, pretty much every table purchases at least one bottle.
Why can’t more restaurants do something like this? I’m not saying they should have a separate retail section, or even necessarily go the trouble involved with creating as terrific of a wine selection that March Bacchus has. But wouldn’t a pricing policy based on retail + $X, where $X is something reasonable, result in wine sales that are a lot higher than a formula of triple wholesale or double retail that may force a lot of consumers out of the market? Somewhere that old supply/demand curve from Econ 101 should kick in and help to determine the right profitable formula. I realize that every situation is different and every restaurant needs to look at its local clientele [and I also realize that restaurant owners are entitled to price their offerings at any amount they want], but it seems to me that reasonable wine pricing could result in much higher wine sales overall and greater profitability. I’m sure there are factors I am not taking into account. I’d love to hear from members of the restaurant industry on this issue, especially those who have experimented with their pricing.
Michael Perlis provides outsourced controller services to businesses that do not need a full-time controller. He balances this with his interest in wine: reading and writing about it and, of course, drinking it. He is still trying to figure out how to combine these two pursuits. Feel free to contact him about either at email@example.com or firstname.lastname@example.org.