Wine List Mark-Ups
It is known to most customers that wines, coffee and water are three of the most profitable items sold in a restaurant. What they may not realize is how little profit is made in other areas of the business. The overall costs are huge compared to the final selling price of the dishes on the menu when taking into consideration the staffing costs, depreciation of equipment, gas and electricity, constant refurbishment of front of house areas, replacing glassware, cutlery, linen (items that are often of very high quality) the cost of fresh flowers, business costs – including marketing, printing costs, refuse disposal, etc, etc.
There is only a certain limit that people can conceive paying when it comes to menu items, even though the chef may well being buying the best produce he can, giving generous portions and garnishing them with expensive items and serving them on top quality crockery.
Staff costs can be the largest cost, take for example a small gastronomic restaurant that may be serving up to 70-80 covers a day. Their workforce will probably comprise of something like 8-10 chefs, 8-10 waiters, 4 kitchen porters, 2 receptionists, 2 sommeliers, 2 barman and 3 managers – say 30+ staff, nearly half of the customers being catered for.
Mark ups and margins can vary between restaurants depending on the style of the establishment, the size of the wine list and the cost of the menu.
Generally most sommeliers are not comfortable with very high mark ups; their aim is to make the customers happy and not to have them feel as if they have been ripped off. The best wine lists have a broad spread of wines at different prices. In this way they give customers a choice between spending a relatively little amount or more depending on their budget. Creating a varied list is an essential part of the sommeliers job and something which they take a lot of pride in doing. Even though wines at a £20-£25 price may have a 70-75% margin, the wine may be of exceptional quality and value for money, a great example of what it should be or a quirky example of a new style of wine. These kinds of wines are not easy to come by and do take seeking out. They are often unavailable for customers to buy off-premise. As the wines increase in price it is undoubtedly also due to an increase in quality and it can often be up to the sommelier to justify the mark-up. On larger wine lists this can be done as ultimately some wine may sit in cellars for years or months gaining age, complexity and stabilizing itself to the perfect moment for serving. To then be carefully chosen or suggested to fit the occasion and served correctly at the ideal temperature and in the appropriate glassware. To say ‘I am not paying all that money just to have some bloke take a cork out of the bottle’ is simplifying things to the extent of claiming that you would not pay menu prices to have some chef ‘fry up a bit of meat’.
There are a lot of costs to consider – so when in a restaurant, sitting in pleasant surroundings, being looked after by polite and attentive staff, enjoying good food, created by hard working professional chefs – try to consider these things before using phrases such as ‘rip-off’ and ‘con’. Some things can generate revenue whilst others do not, so in effect beverage sales subsidize other areas.
At the end, the customer’s choice of wine is still up to the customer and there should be a selection to suit all pockets and keep everybody happy.
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