Many restaurants determine wine selling prices by applying a percentage mark-up to the cost, meaning wines that cost more are proportionally more expensive on the wine list.
In reality, for many mid-market restaurants this approach does not always work, as when the cost of wine reaches a certain level the potential selling price can be too prohibitive for the customer base. There is also a much more sophisticated approach to setting both wine and menu prices, menu engineering, which focuses less on margins and more on the actual cash that each sale will achieve. After all, would you rather pay a cost of £5 and sell it for £10 or sell a £30 bottle of wine that cost £20, making you a £10 profit instead of the £5 from the cheaper bottle? This is a separate topic that we will cover at a later date.
There have been a few press reports in recent months as to a number of restaurants now applying a more straightforward approach to the setting of wine prices, by applying a standard charge to any bottle. Therefore, in comparison to the previous approach, the customer can enjoy a much more expensive bottle of wine at a much lower price. What is even more interesting, however, is how some of the restaurants doing this are not only benchmarking their wines against the same wine at much more expensive and well known establishments, they are intentionally selecting wines from these establishments’ wine lists. This means that if the restaurant has access to wines that are less available for direct purchase by the public, the customer can enjoy a previously less attainable wine at a fraction of the cost in comparison to the same wine from higher-end establishments.
See below link for recent press article.
Restaurant wine ‘price checker’ makes the bill easier to swallow
With so many different ways of pricing wine and menu items it is essential that the approach taken provides your restaurant or café with the greatest return for the business as well as a fair deal for your customers.
If you need help setting up a new restaurant or café or are looking at developing your existing operation, do get in touch to see how we could support you.
Montfort Catering Consultants – Catering Consultancy For Informed and Inspired Catering Advice
Posted on February 25th, 2012