Whilst recently enjoying a very (as usual) satisfying meal at William and Victoria’s in Harrogate, the conversation as so often does at such gatherings, turned to wine and the obscene mark-up that restaurants make. As by that time, in the name of research, I had already quaffed several bottles of the offending stuff, I unusually did not make too much comment other than a few disagreeing grunts and a bit of finger pointing in a manner that suggested that I had an important point to make, which I did, but failed to and in fact only succeeded in confirming that I may have had one too many. About six drinks ago.
So I feel compelled to make my point now. You see the supposed huge profit to be made on wine is one of the biggest fallacies which surrounds the restaurant business. Yes there is a large mark-up, but remember restaurants are not selling it as take-away. There is a huge different between mark-up and actual profit. Please let me explain with a few facts and figures:
Your average, decent bottle of house wine costs around £3.50 minimum. Forget any notion you may have that restaurants get to buy wine cheaper from suppliers; I can’t speak for the huge ‘chain’ restaurants, but the independents pay the same price as the public do. But that’s okay; that £3.50 bottle can be knocked out at a minimum of £13 per bottle which gives a staggering £9.50 per bottle profit for doing, well pretty much nothing really other than pulling a cork.
But let’s just look at this a bit closer. There are some people (and I will admit, I am one of them) who will go to a restaurant and buy and drink wine as if it’s not only going out of fashion, but it’s unlikely to come back into fashion in any shape or form in the next four decades. But the majority of diners will not exhibit or support such blatant alcohol abuse that I openly applaud. They will at best share a bottle of wine with their fellow diner. So now that staggering £9.50 profit is divided between two customers; that’s £4.75 each. Still doesn’t sound that bad, until you realise that this couple are more than likely going to make this bottle of wine last their entire evening. So that’s £4.75 total profit from alcohol sales, for one customer, all night. Not that great really is it?
The restaurant has to pay for the electricity and heating whilst they are enjoying this wine. The CD that is now playing in the background is costing in PRS licence fees. Is it white wine? Then we have just shelled out further on ice cubes for the ice bucket. That £4.75 profit is beginning to look a little pathetic. The staff serving this wine have to be paid; every minute that they make that last drop last is costing the restaurant in staff wages. And what if they were to break their glass through some drunken action? Well now we are probably into a loss. And then when they finally leave, they choose to pay by credit card, and so now our so-called flexible friend is going to take his cut of this already negative profit.
But that does not stop customers consistently complaining about wine mark-up.
In our restaurant we introduced a Bring Your Own policy for wine, allowing the customers to bring their own wine and we just charged a nominal corkage charge. Suddenly people started drinking far more than just one bottle a night and we actually made a bigger profit without any initial outlay or stock holding costs.
So I feel compelled to make my point now. You see the supposed huge profit to be made on wine is one of the biggest fallacies which surrounds the restaurant business. Yes there is a large mark-up, but remember restaurants are not selling it as take-away. There is a huge different between mark-up and actual profit. Please let me explain with a few facts and figures:
Your average, decent bottle of house wine costs around £3.50 minimum. Forget any notion you may have that restaurants get to buy wine cheaper from suppliers; I can’t speak for the huge ‘chain’ restaurants, but the independents pay the same price as the public do. But that’s okay; that £3.50 bottle can be knocked out at a minimum of £13 per bottle which gives a staggering £9.50 per bottle profit for doing, well pretty much nothing really other than pulling a cork.
But let’s just look at this a bit closer. There are some people (and I will admit, I am one of them) who will go to a restaurant and buy and drink wine as if it’s not only going out of fashion, but it’s unlikely to come back into fashion in any shape or form in the next four decades. But the majority of diners will not exhibit or support such blatant alcohol abuse that I openly applaud. They will at best share a bottle of wine with their fellow diner. So now that staggering £9.50 profit is divided between two customers; that’s £4.75 each. Still doesn’t sound that bad, until you realise that this couple are more than likely going to make this bottle of wine last their entire evening. So that’s £4.75 total profit from alcohol sales, for one customer, all night. Not that great really is it?
The restaurant has to pay for the electricity and heating whilst they are enjoying this wine. The CD that is now playing in the background is costing in PRS licence fees. Is it white wine? Then we have just shelled out further on ice cubes for the ice bucket. That £4.75 profit is beginning to look a little pathetic. The staff serving this wine have to be paid; every minute that they make that last drop last is costing the restaurant in staff wages. And what if they were to break their glass through some drunken action? Well now we are probably into a loss. And then when they finally leave, they choose to pay by credit card, and so now our so-called flexible friend is going to take his cut of this already negative profit.
But that does not stop customers consistently complaining about wine mark-up.
In our restaurant we introduced a Bring Your Own policy for wine, allowing the customers to bring their own wine and we just charged a nominal corkage charge. Suddenly people started drinking far more than just one bottle a night and we actually made a bigger profit without any initial outlay or stock holding costs.
2 comments:
That is so funny that allowing your customers to bring their own wine yielded more profit, but I can see where they would consume their bottle and want another when their guard was lowered from the bottle they had just imbibed... genius!
Ingenius idea, love it!
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