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An unscientific look at local by-the-glass wine pricing [moved from Boston board]

I got some fellow Hounds a bit worked up recently by saying that I think The Butcher Shop’s wines by the glass are overpriced. It was just my gut feel, but several Butcher Shop fans vigorously disagreed. Nobody had any real data, so I thought maybe I could do some research to try to bring some facts to a discussion that so far had been just competing impressions.

So I did some sampling of by-the-glass prices from three lists that were put together by respected local wine professionals: Coda (Deborah de Haro), Troquet (Chris Campbell), and The Butcher Shop (Cat Silirie). Coda has fairly wine-ignorant servers pouring very modest wines in not very nice stemware, likely not at proper cellar temperatures – quite unlike the other two places -- but it’s a thoughtful, budget-minded list I admire. Troquet and The Butcher Shop have many admirers among local Hounds and clearly position themselves as havens for wine lovers.

I multiplied by-the-glass prices into full bottle prices (5 times 5oz pours at Coda and The Butcher Shop, 6 times 4oz pours at Troquet), and compared them to a typical consumer retail price gleaned from Google searches of US wine retailers. I was surprised by the results:

Coda: consistently a 280 to 320% markup (example: 2004 Santi Valpoicella Ripasso, poured here for $8/glass, which works out to $40/bottle, vs. a typical $14/bottle retail price. $40 divided by $14 = 290% markup). This strikes me as a pretty typical bottle markup for many restaurants, though is perhaps low for an individual glass.

Troquet: a shockingly low 140 to 160% markup (example: 2001 Rafanelli Zinfandel $11.50/4 oz glass, which works out to $69/bottle vs. a typical $50/bottle retail price. $69 divided by $50 = 140% markup).

The Butcher Shop: much more variable, with markups ranging from 260 to 550%, but most falling in the 450 to 500% range. Example: the 2005 Costaripa Marzemino, poured here for $14/glass, which works out to $70/bottle, vs. a typical $14/bottle retail price. $70 divided by $14 = 500% markup.

(I can only imagine what this analysis would yield at truly egregious gouger like Fleming’s.)

Caveats: This is only a snapshot looking at five or six by-the-glass wines from current lists. There are outliers on either side, an occasional great bargain or even higher markup. Using retail prices to calculate “markup” is probably sub-optimal, though it’s the only baseline I can think of with readily available, verifiable data. I might be incorrectly estimating the pour size at Coda and The Butcher Shop (Troquet’s pours are very precise). You could probably find retail prices that are both higher and lower than the ones I used, though I tried to pick a median one. Perhaps I'm failing to factor in important costs (real estate, storage, shipping, stemware, etc.) My math skills aren't what they used to be. Maybe the whole analysis overly simplistic and half-assed in some way that hasn't occurred to me.

But I did try to come up with a representative sample, and not cherry-pick for results that supported my hypothesis. My methodology is admittedly rickety, but it’s the best I can come up without the benefit of insider information. I’d welcome any refinements or alternative analyses anyone would like to propose. But at first blush, I’d say my gut feel about The Butcher Shop was reasonable. (I can provide more raw numbers if folks want to see them.)

There’s a separate debate worth having about whether the wine markups at any given Boston restaurant are justified by its intangibles: atmosphere, unique/unusual selections, staff knowledge, accompanying food, etc. I understand how someone who loves The Butcher Shop could look at these numbers and say, "To me, their wines by the glass are still a good value", the operative word "value" being subjective. But I thought that looking at such hard numbers as I could find might provide a useful basis for further discussion.

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  1. Great report...thanks for doing all that research for us. My math/value obsessed SO will just love this.

    1. This is the sort of stuff that should get published in the Globe's food section. Thank you.

      1. I was always under the assumption that for glass pours the price of the glass equals the cost of what the restaurant pays for the bottle... which works out to a 300% - 400% markup.

        10 Replies
        1. re: ponyboy

          I have heard this same rule of thumb cited, too, but if we can fairly assume that the restaurant's cost is well below retail, that works out to even higher markups.

          But maybe the difference between the restaurant's cost (call it wholesale) and the retail cost is roughly equivalent to those other "overhead" costs I cited (facilities, labor, equipment, etc.) that my simple model doesn't account for. So maybe it's still a decent rule of thumb.

            1. re: bowmore36

              I'd welcome the addition of some facts or expertise to this discussion from you, bowmore36. There's clearly a lot I've thrown out here that's debatable -- that's kind of my object, to try and get a rational discussion going instead of just people shouting their personal viewpoints. On what do you base your assertion that "you can't assume that... no way"?

              1. re: MC Slim JB

                i base it on years of working in and with restaurant, retail, distribution, importer, farmer, broker etc.. as well as having intimate knowledge of price structures of them all, in different states around the country.
                it's not a viewpoint, it's practical knowledge...

                1. re: bowmore36

                  That's great, bowmore36, exactly the kind of expertise I've been soliciting in this and other related threads from the beginning. I'm frankly surprised you didn't disclose your professional credentials earlier.

                  Is there any way you can bring some concrete examples to the table to help me understand what's really going on at places like The Butcher Shop and Troquet?

                  1. re: MC Slim JB

                    i'm really not one to boast what i may or may not know...
                    i leave that to others on here. i find that there is more value for those devout CH'ers to read the questioning of those .
                    but if there are future topics that one would like some input on, i would be happy to do so.

                    1. re: bowmore36

                      Not even one example? That's too bad. Hopefully others with similarly deep expertise will be willing to chime in.

              2. re: bowmore36

                I'm in the bussiness (retail side) and whenever a distributor gives us a price sheet there is the list price, discounted price for large orders, and the by the glass price for restaurants, large order or not is always the lowest.

                  1. re: bowmore36

                    sorry, i'm in chicago. Some states don't allow any discounts (i think Michigan-they see it as bribery) but most allow it.

          1. Thanks for the great report. Your contributions are always valued but this is the kind of post that makes Chowhound the wonderful site that it is. I recall Limster posting that Legal Seafood had very fair wine prices (not sure if it was by bottle or glass) and I've always enjoyed the variety and apparent vaue of Les Zygomates for wines by the glass. It would be interesting to see how these two fare.

            3 Replies
            1. re: gourmaniac

              First, thanks MC for your usual fantastic contribution.

              I was recently at an AIWF wine tasting at Legal Test Kitchen. Sandy Block was the speaker. He is VP of Beverage Operations for Legal and a renowned wine expert. He said Legal tries to keep their wines among the lowest priced.

              Petit Robert Bistro has reasonable wine prices and Geoffrey's used to have really great wine prices when they were in the South End but I don't know about their new location. The new restaurant, Gaslight, part of the Aquitaine group I believe, states that they will have wines starting at $4.00 a glass.

              On a different but related subject, I have been pricing Crown Royal Manhattens at various places and strangely enough Legal's was the highest @ $10.75. The prices ranged from $6.00 @ Floramo's (yes, I know, no comparison as a restaurant but an excellent drink), $8.95 Incontro, $9.00 Gibbett Hill Grill, and $10.00 @ Sage.

              1. re: edgewater

                OMG, I spelled Manhattan wrong and I was born there, in addition to on occasion imbibing one!

                I also meant to say when I was pricing wines for a private club I marked them up 350%.

              2. re: gourmaniac

                re: Legal's it was by the bottle. Others have mentioned it too; I remember reading about it on the board a while ago.

              3. "Perhaps I'm failing to factor in important costs (real estate, storage, shipping, stemware, etc.) My math skills aren't what they used to be. Maybe the whole analysis overly simplistic and half-assed in some way that hasn't occurred to me."

                "(I can provide more raw numbers if folks want to see them.)"

                I'd love to see all of the raw #'s. I'm working on a similar comparison. I'll share my findings when I'm done. Thank you.

                14 Replies
                1. re: BostonBarGuy

                  Here's a representative sample, including a couple of outliers:

                  Coda
                  NV Brut D’Argent Blanc de blancs NV $8/glass $11/retail 5x8=40/11=363%
                  2005 Domaine L’Hortus Rose de Saignee $8/glass $14/bottle retail 5x8=40/14=286%
                  2006 Burgans $8/glass $12/bottle retail 5x8=40/12=333%
                  2003 Beronia Crianza $8/glass $12/bottle retail 5x8=40/12=333%
                  2004 Cuatro Pasos $8/glass $14/bottle retail 5x8=40/14=286%
                  2004 Santi Valpoicella Ripasso $8/glass $14/bottle 5x8=40/14=286%

                  Troquet
                  NV Veuve Clicquot Brut $12.50 4 oz $39/retail 6x12.50=75/39=192%
                  1998 Chauteau de Fieuzal Blanc $13.50 4 oz $62 retail 6x13.50=81/62=130%
                  2000 Altamura Cabernet Sauvignon $18.50 4 oz $68/bottle retail 6x18.50=111/68=163%
                  2001 Rafanelli Zinfandel $11.50 4 oz $50/bottle retail 6x11.50=69=138%
                  2002 Dr. Loosen Auslese $12.50 4 oz $55/bottle retail 6x12.50=75/55=136%
                  2002 Bouchard Savigny Les Beaune $9.50 4 oz $36/bottle retail 6x9.50=57/36=158%

                  Butcher Shop
                  NV Nino Franco Prosecco $9/glass $10/bottle retail 5x9=45/10=450%
                  2004 Schroeck Ruster Ausbruch $22/glass, $20/bottle retail 5x22=110/20=550%
                  2004 Chateaux de Brondeau Bordeaux Superiuer $12 glass, $12/bottle retail 5x12=60/12=500%
                  2004 Paul Pernot Puligny Montrachet Cote d'Or $13/glass $25/bottle retail 5x13=65/25=260%
                  2005 Costaripa Marzemino $14/glass $13.50/bottle retail 5x14=70/13.50=538%
                  2005 Montirius Cote du Rhone $13/glass $12/bottle retail 5x13=65/12=542%

                  Before anyone starts sniping these numbers, please note my caveats above. Hope this helps!

                  1. re: MC Slim JB

                    The 550% markup on the $22/glass wine seems really egregious.

                    1. re: DoubleMan

                      That's one of the outliers I mentioned. I tried to drop the worst ripoffs and the best deals (the high and low outliers) from my recap of typical markups.

                    2. re: MC Slim JB

                      Slim,
                      Nice thread here. Now you may remember me from the earlier thread on this topic. I think a more reasonable approach to this would be to compare the exact same wines at different restaurants. Forget retail altogether. Just by starting a thread about the value of wine in restaurants you have to factor in the intangibles. If you want value wine, buy it at retail and drink it at home, then you wouldn't have to worry about the intangibles at all. I am one person of many that is from the camp that atmosphere, unique/unusual selections, staff knowledge, accompanying food, etc. all make it the total experience, and I have thought that way since honeys was wearing sasoons. I know from earlier threads on similar subject that you too are from that camp. You are a big fan of the stellar bartender in this city if i remember correctly, places like no 9 for their unique cocktails and service that accompanies them, but, are they really worth $11. An $11 cocktail has less than $2 of product in it. I think we should start a thread about liquor markups because they are truly absurd.

                      Places like Coda that you mentioned about could care less about what their wine cost is like compared to a place like a wine bar, because they have liquor to make the money from. Restaurant cost is not well below retail either.

                      I also think that you have to look at value from an entire wine list standpoint. Too many places in this city serve absolutely horrid wines by the glass and only a few places actually put a lot of time and effort into their wines by the glass selection. Places like The Butcher Shop (actually all of Lynch's places ), Troquet, Bin 26, and a few and I mean few actually put some thought into their wine lists and do not let the sales people from the distribution companies push crappy wine on them so they make more on commission. I do not wanna drink $12/gl Kendall Jackson Chard, i wanna drink tasty, refreshing wine.
                      There are alot of issues that can be discussed here like The Euro, prices of all European wines are rising due to the Euro. Also 2005 Burgundys are all going to be much more expensive than recent vintage because the vintage is said to be stellar, that might scare most Chowhounders away, but nevertheless there will still be value in some of the wine, like Macon. Should we be scared?

                      1. re: jpeso

                        I didn't see this post of yours before, jpeso; this thread got massaged a bit by the mods before landing on the Wine board. I think I partly responded to your "intangibles" question in your other post below, basically saying that, yes, you need to factor in intangibles to judge "value", but I still think it's helpful to know approximately what the wine costs the restaurant, so you can know roughly how much the markup is, and decide whether it is subjectively worth that difference.

                        A lot of the factors that people cite here (the Euro, standout vintages, insurance costs, etc.) are indeed relevant to wine prices, but don't they affect all restaurateurs roughly equally? They seem far less relevant in explaining differences in pricing than rents (which vary widely by location, when the lease was struck, etc.) and market-driven pricing decisions made by the restaurateur (e.g.," How high a price will our target customers tolerate?").

                        The "breadth of wine offerings" is one of those intangibles: important to some, perhaps explaining higher margins, but not of equal value to all comers. I'm certainly a wine drinker who likes to see a longer list that includes unusual, unfamiliar wines that knowledgeable staff can educate me about. So those are factors in The Butcher Shop's favor, though perhaps not enough by themselves to justify a 200-300% greater markup than the equally-interesting, diverse, intelligently-staffed Troquet. I doubt their respective rents account for all that difference.

                        As an aside, Coda isn't trying to be in the same league as Boston's wine bars, but I think it deserves credit for bringing in someone smart to build an interesting, affordable list for the type of bar/restaurant it is. It's an approach I'd love to see emulated at more under-$20/entree places: shun familiar low-end Cali wines (junk like that K-J) in favor of lesser-known, better-value wines from Spain, Austria, South America, etc. I'm sure many folks get upset that they can't get a merlot or chard of the sort they get at Costco, but Coda uses it as an opportunity to serve them a better wine for the same money. Admirable, in my book, though it would help if their servers were slightly better trained.

                      2. re: MC Slim JB

                        First, let me say that I like your idea, and your results don't surprise me much. Troquet has excellent wine prices, which has been true since their previous incarnation (under a different name) in Allston/Brighton. I would have been more surprised if any other restaurant had come close to their markups.

                        That said, I can see a few issues that aren't covered in your caveats.

                        Some of these wines aren't sufficiently identified. Some producers make more than one type of the class of wine listed (e.g. "Dr. Loosen Auslese"), so it's possible that the restaurant is serving a different wine (potentially significantly more or less expensive) than the one you priced.

                        Another issue is that the Troquet list is dominated by older bottles. Since they cellar at least some of their own wines, they were probably purchased at far cheaper prices than current retail (especially if those retail wines have been recently sourced from Europe, where the stronger Euro has driven up prices in dollars). In addition, retail prices for older wines tend to be inflated beyond their true value. They are generally much more expensive, than, for example, auction prices for the same wines which typically have better provenance. Troquet is still charging a hefty markup, even when including the costs of storage, but it seems reasonable because retailers tend to charge a ridiculous markup on older vintages. Rafanelli is another tough one because they don't sell through wholesalers/retailers. Any retail price you see for Rafanelli Zin must be from a secondary market, and is likely to be significantly marked up by the retailer because few stores would have it, so it's not one I would use in a price comparison.

                        Did Heidi Schröck really make a 2004 Ruster Ausbruch for $20/bottle retail? I have seen some mis-marked bottles on the web (calling her white table wines "Ruster Ausbruch" when they are not). Ruster Ausbruch is typically a fairly expensive dessert wine, and Schröck is a well-known producer. A more normal price, say for her Ruster Ausbruch Turner would be about $40-70 per 375ml half-bottle, which would significantly affect the markup calculation.

                        And where are you getting 2004 Pernot Puligny Montrachet for $25/bottle? K&L, a fairly respected merchant, not known for gouging, lists it for $39.99. Zachy's has it for $44.

                        In the end, though I agree that at least some of the Butcher Shop's markups are pretty high. The Franco Prosecco Rustica, Brondeau and the Montirius all look clearly overpriced to me.

                        1. re: overproofed

                          These are all valid points, especially about potential confusion between under-identified wines. As I said, I expect folks to find the wines I've cited at both higher and lower prices online (I didn't save my web searches, but I came up with all these figures yesterday.) Your point about Troquet's cellaring is very useful: it helps explain some of their dramatically lower markups.

                          But I think it's fair to say, despite some room for debate about specific numbers, there are some rather clear trends in how each place prices its wines by the glass.

                          1. re: overproofed

                            IIRC, the rieslings at Troquet are all Urziger Wurzgarten -- Kabinett, Spatlese and Auslese. However, they are currently serving all the '05s (very rich), not the '02s, so that's not from the current winelist -- they haven't served the '02 for a couple of years (went through the successive vintages). The '02 Bouchard pinot noir hasn't been on the list for a long while too. They've gone through 2 other red burgundies on that spot in the winelist.

                            1. re: limster

                              Maybe someone can capture the current prices for these specific wines/vintages at Troquet. But I believe these examples are representative of their typical markups, extending across wines they offer by the 2 and 4 oz pour at every price level with remarkable consistency.

                            2. re: overproofed

                              overproofed.... i really like your insight and you seem to have great knowledge of this subject.
                              to that end, the use of google to find retail prices has a serious flaw. the prominent retailers/auctions on the web such as zachy's, K&L, 20/20 wine merchants etc.. are in other states first and foremost. state by state, taxes, importing, distribution will effect pricing by quite a bit.
                              for instance, florida has no state tax yet they have consumption taxes that will increase the pricing of liquor, wine and others.
                              states that allow importing and distribution under the same roof can have significant price differences from those that don't allow it. there are multi-layered distribution states in which pricing will be much higher than the latter.
                              as jpeso mentioned... comparing retail to restaurant never translates well. and it's never fair to say restaurants get better pricing then retail. that is completely inaccurate.
                              floor stackers at martignetti??? come on!!!!

                              once again... going to a restaurant such as tbs and finding wines that aren't available most other places makes it that much more enticing to shell out a few extra bucks. the majority of restaurants use the chardonnay, cabernet, shiraz by the glass model. (lame)
                              those who seek out the interesting wines should be able to command a bit of a premium for the hard work they do. why cheer on someone who slaps together a run of the mill wine list, and doesn't know how to store and serve wine?? it's perpetuating the lack of excitement at most restaurants.

                              i think there is also an important idea that hasn't been touched on...
                              an $18 glass sounds expensive, no argument from me. that suggest the bottle should be around $72 if my math is correct. the incentive is to be able to try an interesting glass of wine without having to invest a lot of money. that sounds like a pretty good deal to me. not to say you cant find interesting glasses for $7 or $8 but at that point a bottle isn't too far out of the question.

                              1. re: bowmore36

                                I agree, bowmore36, that there are higher and lower prices to be found for the examples I've cited, but is the variance so great as to completely invalidate the model? If I can find a wine at retail in five different states around the country for $40, what's the likelihood that the price is going to be completely different (say, $20 or $80) in MA?

                                I agree entirely (have said it several times in this thread already) that there is value in a wine list with diversity and little-seen wines; I seek those out myself. But the subjective assessment of "value" is not what I'm aiming at here. I'm trying to find a quasi-empirical method of gaining some insight into how much restaurants mark up their wines over cost, so you can get a rough idea of how much the price you're paying for the glass exceeds that cost. That's a potentially important data point for helping you decide whether it's worth the markup (a far more subjective question).

                                I'm not arguing for cheap wines: I deliberately used the example of Troquet, another wine connoisseur's restaurant that seems to mark up its wines much less while pouring wines of similar rarity and interest and price to The Butcher Shop's.

                                I'd buy the argument that an $18 glass of wine is a cheap way to experiment with a costly wine -- if the wine actually retailed for $72. But that's not what's going on at The Butcher Shop: for what you're paying for a single glass, you could get almost an entire bottle at retail. A better argument would be "That wine is hard to find at retail around here, so the 450% premium is worth it." Again, that's a more subjective argument, one that places a very big premium on the wine's rarity among local retailers, and assumes that every wine they serve is very hard to find locally, which I don't believe is true. (TBS does have some exclusives, like that '06 Loimer Gruner Veltliner "Cuvee Cat".)

                                I guess it's true that buying one glass before you buy a bottle *at the same restaurant* reduces your risk of getting a bottle you're not in love with, but still has no bearing on this discussion of relative markups among competing restaurants.

                                1. re: MC Slim JB

                                  so take everything else out of it and simply identify the quality of a wine in question. is it worth the price? can you compare it to others of its origin? can you compare it to others at its price point? can you compare it to others of the same varietal? and provide the knowledge, as opposed to collecting data of wine prices on the internet and/or retail? that what my comments intended

                                  1. re: bowmore36

                                    I'm hardly trying to diminish the importance of wine knowledge, expertise, and connoisseurship, bowmore36 -- to say nothing of the sheer love of wine and the pursuit of its pleasures. But I don't think my goal here should be that hard to grasp, especially to a wine professional of your background.

                                    Wine cost to the restaurant and the subsequent markup to its by-the-glass price -- that's the one data point I'm trying to build some clarity on. Of course -- clearly, patently obviously -- that's not the *only* way to evaluate wine. You may even argue that it's utterly unimportant compared to the more rarefied qualities you cite. But to any Chowhound who isn't independently wealthy, I think my investigation, however flawed, might be of some interest: Who's giving you a better deal on such wines, as measured in this one particular way?

                                    I'll leave it to better trained, more experienced, more sensitive critics of wine to apply ratings to a particular wine's quality. I'm focusing on one very specific, limited definition of a wine's value. It's not the only one, nor the most important one: it's just the one I'm looking at right now.

                                    While I'm not a wine professional, I resist the notion that restaurant wine pricing is analysis-proof. I don't pretend that I've stumbled on some optimal method to uncover costs. But I think the topic of cost vs. price is relevant, and in fact worthy of discussion without touching at all on whether the wines themselves are worthy. I'll again salute the enormous talent of the wine program managers involved: let's all take it as a given that they're pouring quality wines, not junk.

                                    Rather than discuss non-cost-related issues regarding the quality of wine (maybe that's a new thread you could start?), I'm looking for any insight Hounds can bring to my examination of wine costs vs. by-the-glass prices in Boston restaurants. Given your expertise, it seems like you're in the perfect position to debunk my assumptions, to bring some real-world facts to my amateur hypothesizing, to help everyone here understand how things actually work. I and a lot of Hounds would thank you for that.

                              2. re: overproofed

                                I revisited your point, overproofed, about the 2004 Paul Pernot Puligny Montrachet. I can't figure out where I found that $25 retail bottle price; let's assume that's a research error on my part. It makes the one favorable outlier in my Butcher Shop research stick out even more as a bargain.

                                Let's go with an average of the prices you cited as more typical:

                                $13/glass $42/bottle retail 5x13=65/42=155%

                                So there's one wine BTG at The Butcher Shop out of all the ones I sampled that appears to be as good a bargain (only a 155% markup) as Troquet offers on just about all of its wines BTG.

                                This Montrachet is not on The Butcher Shop's current list, but was a nightly special last week. I wonder if maybe the nightly specials are deliberately priced more favorably than the BTG wines on their more permanent list. This would be a tremendous hidden deal to uncover, if true.

                          2. Nice thread. You should take the job at the Globe for the perks alone. Overpriced mediocre wine has replaced smoking as a reason many Bostonians don't dine more often...

                            1. Fantastic work! Many thanks for doing the research. I've always felt like Troquet's wine list is very fairly priced. I appreciate the unscientific confirmation. I'm feeling really greedy now, I want more restaurants analyzed! I'd actually be really interested to know how Craigie Street would compare.

                              1. MC, This is an excellent report. I've always felt that even though some establishments charge high prices for wine by the glass, it gives a lot of diners the opportunity to try wines they might otherwise never get close to. "Whatever the traffic will bear." Keep up the good work.
                                CocoDan

                                1. I offer up a scientific response to wine pricing in restaurants
                                  A. Rent in the city of Boston, esp the SE is an average of $50 sq/ft
                                  B. Labor Cost to provide you with a clean glass and someone to serve it to you not to mention to seat you and clean up after you is 30% of every dollar.
                                  C. Liq Liability Insurance that protects everyone is an average of $500-$1000 + per month.
                                  D. Build Out, the cost to provide anywhere from casual funky to custom made booths set back the avaerage small biz person $400,000.

                                  of course there is alot of other factors that eat away at the mark up on food and wine as the typical restaurant bottom line after paying all the bills is 10% of every $1. and after a few years of experience in can rise up to maybe 18-20% so you see there is not a 500% profit to the biz or the owners, I hope this helps all to understand the complexity of pricing wine and food.

                                  3 Replies
                                  1. re: bspence

                                    These are interesting and useful points. The question that you've raised in my mind now is: are there huge big differences in these costs between the three restaurants that somehow contribute to the huge differences in how they price wines by the glass? For instance:

                                    A. Real estate: I have no idea what kind of lease deals have been negotiated at Coda or The Butcher Shop (both in the South End) or Troquet (on Boston Common).

                                    B. Labor: I assume Troquet and TBS pay their more wine-literate servers better than Coda does its servers.

                                    C. Liquor liability insurance. I don't know how this works: might these costs be roughly equal at each restaurant? Does it depend on seating capacity? Type of license (Coda = full liquor, TBS = beer/wine/cordial, Troquet = full liquor)?

                                    D. Build-out. Another one where I have no idea what the respective startup costs were. I know all three places were significant remodels from their predecessors; Troquet also did a big expansion upstairs, adding a lot of seats.

                                    I suspect that rent might be the biggest factor influencing each venue's underlying costs, and the biggest differentiator between these three places.

                                    I also believe that in the pricing, there's some basic capitalism at work: The Butcher Shop charges more because the market, for a variety of reasons, will bear it. Even if its customers understand they're paying relatively high prices for wines by the glass (an idea not evidenced by some postings here), they don't care: they still consider the whole package a good value.

                                    Troquet charges a smaller markup because (I believe) encouraging enjoyment of wines with fine food is "its thing": its big differentiator, the major reason its owners chose to do what they're doing. (Maybe their food margins are higher.)

                                    1. re: MC Slim JB

                                      Liquor liability insurance is rated on annual revenue, often with a breakout for booze vs food sales. Costs depend on amount of insurance purchased and yes, wine & beer vs liquor are contemplated in the rating.

                                      1. re: MC Slim JB

                                        The relationship between costs and pricing can be pretty complicated, but generally costs that you would consider to be fixed or sunk should have no direct effect on pricing. Let's put it this way - if the amount of wine-by-the-glass you sell cannot affect a certain cost (long-term lease, or renovation costs, for example), you shouldn't factor those costs into your pricing. Even if the restaurant thinks they're taking fixed costs into account, they're not really doing so if they make the right adjustments based on customer response (try to explain later). Where the fixed costs come into play is the decision to stay in business - if you're maximizing your profit and still not covering your overhead, unless you can turn things around fast it's time to shut down.

                                        Costs that are relevant are things like:
                                        - acquisition costs (naturally - and this includes the time spent hunting down and negotiating for hard-to-find stuff)
                                        - the premium commanded by wine-literate servers (assuming you need more of them to sell more wine)
                                        - stemware (the more you serve, the more you break)
                                        - the opportunity cost of storing all that wine (assuming you could have done something else of value with that space - age your own cheese or cure salumi or whatever).

                                        However, I personally think the prices are probably more demand-driven than cost-driven. For example, it may seem that higher-rent places charge higher prices, but it's more likely because they are in better locations with higher demand. If the restaurant starts of with markups based on their rent, they're probably not too far off where they should be. One thing about the restaurant business is that it's really easy to tweak prices depending on customer response - so they can start with some cost-plus formula, and if it's selling (or they anticipate it'll sell well), price it a bit higher or lower as appropriate. So they can end up pricing very well without thinking too hard about accounting details.

                                        I think you're onto something when you say basic capitalism is at work. It's demand, guys. The markups, they're set wherever it's in the restaurants best interests. As for the budget-minded consumer (me) it's useful stuff to keep in mind (thanks Slim), because I'm willing to travel a bit or lose the atmosphere, in search of a good value.

                                        Note that I'm not an accountant, but know a bit of economics.

                                    2. I wonder about markups on wines sold by the bottle. This has always seemed to me to be more cost effective in restaurants; i.e., the markup on whole bottles seems to be less than the markup on glasses. Which is obvious on the face of it.

                                      5 Replies
                                      1. re: tamerlanenj

                                        I had started on some bottle pricing analysis, too, but I abandoned it: too much work, and the original controversy was on by-the-glass prices. But the early returns confirmed what Limster and others here have been saying for a while: the lowest markups tend to be on the priciest bottles.

                                        1. re: tamerlanenj

                                          Yep, It's not unusual to see wines by the glass with a larger markup than the whole bottle because one incurs the risk of not selling a complete bottle by the glass before it deteriorates. Champagnes and other sparkling wines can be particularly sensitive to this. I vaguely remember that Bin26 's pricing got better when one went from a by the glass to a half carafe, full carafe and then bottle.

                                          Speaking of priciest bottles, I remember the Beehive selling a 1996 Salon Blanc de Blanc from Le Mesnil-sur-Oger for under $500, which is probably less than 2x retail. Way out of my price range, whatever the markup, but a pretty good deal relatively speaking.

                                          1. re: limster

                                            So then the question at The Beehive is: what food do you order to go with that -- do they even have a decent cheese plate? I've been sorely disappointed by the food there. MIght be better off enjoying that one by itself.

                                            Also, how do you feel about drinking that wine out of a cheap brandy snifter? In fairness, I prefer The Beehive's choice of alternative wineglass to Rocca's heavy, oversized water glass -- parfait glass might be a better description. At least the shape of a snifter's bowl makes more sense for wine. Perhaps for better wines, The Beehive does what Rocca has grudgingly started doing: having some real stemware in reserve for guests who demand it.

                                            1. re: MC Slim JB

                                              If I had the money, a '96 Salon would be great to drink by itself; kind friends offered me some of the '90 from a magnum very recently, certainly didn't need anything else to go with it. Since 95 and '96 are roughly as prestigious for champagne as '90, it's probably a reasonable extrapolation.

                                              (But if I had access to a brie de meaux, it probably wouldn't be a too bad a pairing.)

                                              We got decent champagne flutes when we ordered a bottle of champagne (a Bollinger iirc) at the Beehive (this was opening night, so quite a while ago). But I'm sure that wouldn't stop some of the hounds I know from bringing their own stemware.

                                              1. re: limster

                                                Chiming in on this point.

                                                Beehive has *normal* wine glasses. Just ask for one!. They generally do not have many of them so they do keep them for the reserve list. Personally I like the sniffter, but that is just me. How did I find this out??? I asked!

                                                MC, I am really glad you brought this up. When I see a place like Ivy and their whole point is to make all the wine prices the same.
                                                What I have found is 60% of most wine lists are reasonable, 40% expensive.

                                                hmmm. I think you have me looking at the wines by the glass prices a bit closer in the future.

                                        2. I feel like the veil is removed. Thanks for doing this work, I'll think of the sturgeon picture in your profile next time I have a glass at Troquet.

                                          1. The markup on wines (and all alcohol for that matter) tends to be high to make up for the fact that food is not all that profitable. It's true that very little makes it to the bottom line in the restaurant industry - when you consider that a third or more of what you sell food-wise goes to the cost of the food, another third can go to labor, and the remainder easily goes to overhead (rent, insurance etc), then you can look at your alcohol sales as really driving the profit. Labor is minimal, and you don't have the capacity issues that you have with food (as long as you know when to shut someone off). And, if you think that the markup on wine is high, it's nothing compared to the markup on spirits and beer!

                                            3 Replies
                                            1. re: bookgirl

                                              All excellent points, bookgirl: I think we can all agree that alcohol of all kinds keeps the restaurant industry afloat. And lest anyone mistake my point, I'm not here to wring my hands and say, "Ah, restaurants are ripping me off, I can drink much more cheaply at home." I'm out drinking restaurants' marked-up wines most nights of the week, and am perfectly happy to do so.

                                              But based on my admittedly simple methodology, there appear to be some significant differences in how big that markup is at different restaurants. While I expect folks to poke holes in my approach and my numbers, I think broadly speaking that it's possible to conclude that some places are squeezing more out of you for wine for reasons that aren't entirely explained by differences in their base costs. (Namely, I think, *because they can*.)

                                              I'm in favor of capitalism: I think smart businesspeople can and should price their products to whatever the market will bear. As I've said before, drinking Veuve at Silvertone's basement bar is certainly cheaper than drinking it in OM's beautiful dining room, but it's easy to see why some people might prefer it at OM.

                                              I'm just saying: did you know that, by my analysis anyway, The Butcher Shop's markup on wines by the glass is typically about three times that of Troquet's? Budget-conscious Hounds might find this information useful.

                                              1. re: MC Slim JB

                                                It's hard to say why the markups fluctuate so much between restaurants instead of sticking to an industry standard... but it's impossible to know what the differences in their costs are, which could explain some of it. Maybe The Butcher Shop's rent/payroll are significantly higher than Troquet's, or maybe the profits on wine are subsidizing some other area of the operation that might not have the best margins. Also, is The Butcher Shop under single ownership, or are there others involved? Obviously there's less to go around when it's being split among several owners, so maybe the prices reflect how the pie has to be shared. I'm not terriby familiar with either place, but if things are comparable on the front end, something might be really different on the back end.

                                                1. re: bookgirl

                                                  It's more likely, in this specific case, because inexpensive, high-quality wine has been Troquet's hook from the very beginning - and actually, even before the beginning when the same owners operated another restaurant under a different name (Uva). They have always marketed their restaurant to the knowledgeable wine drinker who is looking for a bargain on high quality wines. At their former restaurant, food seemed to be sort of an afterthought, but the wines were even cheaper - because they charged a flat markup from their cost, more expensive bottles were sometimes even priced at less than retail.

                                                  At Troquet, the menu is more successful, but the focus is still wine. As they are in a higher rent district now, the prices have gone up somewhat. Still, their strategy of low markup is unusual in the restaurant industry, and it's not exactly fair to use them as a comparison. They can charge less for wine, probably because they are attracting a specific type of customer, who will order more wine than other people, guaranteeing them high revenue per table (even if they make less per bottle).

                                                  However, this model only works because they are not competing with other restaurants for exactly the same wine-loving customers. If every restaurant followed their model, the desired customer base would probably be spread out, and there would have to be price increases (either in food or wine) to compensate.

                                            2. I think that if you we are going to start talking about restaurant by the glass prices that we must take the intangible aspects into account. Things such as atmosphere, unique/unusual selections, staff knowledge, accompanying food, etc. are a factor as is such things as rent, labor, etc. All of these things take time, and time is money (most of the time). If you wanted wine without these things you could buy retail and drink at home, and you would have a much better value. I think that a useful comparison tool would be to compare the same wines by the glass across several restaurants to determine which value is better. Although i think that you would have a hard time due to the fact that some restaurants pours exclusive wines, which is another factor in pricing. I think another factor in this comparision should be value of the entire wine list. There are very few restaurants that have thoughtfully selected wine list that have a lot of time and energy put into them. The above mentioned place all do, along with places like Bin 26, the rest of lynch's empire, clio, and a few others. This should be a direct factor as to the price of the wine. But so many places pour terrible wines by the glass.

                                              A couple of other things come to mind with this thread.
                                              1. Another thread could be differences in retail wine pricing. Why are places like Brix more expensive then most others.
                                              2. Should we start to compare cocktail prices. I know a lot of people on this board value the cocktail chefery that takes place at a few area restaurants and there is value to that, correct? Is it still a value at $11 a drink for something like an Aviation.

                                              3 Replies
                                              1. re: jpeso

                                                If only places served the same wines: that would make this task so easy!

                                                While I think you have to take intangibles into account when deciding whether you subjectively find a place a good "value", I contend that that's a separate discussion. What I'm trying to do here, if somewhat feebly, is to provide some insight into the underlying cost that these restaurants might be paying, and showing that -- for reasons I am not trying to explain, only guessing at -- some places mark up their wines a lot more than others.

                                                I think it's up to the individual Hound to decide whether that markup is justified in their minds. What I got tired of was hearing that my gut feel -- that some places' wines seemed overpriced -- were completely off base.

                                                So, is a 450% markup a ripoff? You yourself have to make the call: you may believe the intangibles justify it, or not. Is 450% more than 150% (or let's say my research is a bit wobbly, and it's more like 400% vs. 200%)? That is less debatable.

                                                1. re: MC Slim JB

                                                  I think that it depends what you are interested in. Restaurants charge what they can, and what they need to charge to make their business successful.

                                                  At some restaurants, they use high alcohol prices to subsidize cheaper food. At others (e.g. Troquet) they have a model favoring lower alcohol prices (probably expecting wine enthusiasts to order more, or more expensive, bottles than they usually would). There are plenty of ways to run a successful restaurant. I suppose that the relative success of the various models depends on the area and the clientele they wish to attract.

                                                  For those of us who don't own a restaurant, the important thing is to look at it from the customer's perspective. If most of the people in my party are interested in eating, but not in having a drink, we would be better off heading to a restaurant that charges ridiculously high wine prices to subsidize the cost of food. If they are mainly interested in having a good glass or bottle of wine, we would probably be better off at a place like Troquet.

                                                  A restaurant that is truly "not worth the price" will probably not survive for long. Are the high-markup restaurants ripping people off? Not if people leave happy (after seeing the check, that is). Do different restaurants have different market strategies? Definitely.

                                                  1. re: overproofed

                                                    I quite agree, overproofed: Chowhounds should evaluate restaurants from the customer's perspective. What I look for in a restaurant varies with many factors: the occasion, my companions, the state of my dining-out budget, my mood, how closely I'm hewing to my plan to lose that five extra pounds, whether I'm more in the mood for a great cocktail or an extraordinary glass of wine, and so on.

                                                    But I'm a Chowhound, so I guess I always have one eye on value, which in one strict sense can be defined thus: "All other factors being equal -- food quality, ambience, service, location, tolerance of my open-toed sandals, etc. -- which place costs the least?"

                                                    I think you, like many Hounds here, are really talking about non-cost-related factors, which I argue are much more subjective. Clearly there are no absolutes for those values: we live in a world where The Cheesecake Factory and Le Bernadin both survive and profit, and that is as it should be.

                                                    My modest goal here is a simple one: estimate by some readily understandable methodology how much a particular restaurant is marking up its wines over cost. It's your call as to whether that markup is worth it. Judging from The Butcher Shop's nightly crowds, there are plenty of people who have no problem with its average-450%-over-retail markup on wines by the glass.

                                                    No aspersions on The Butcher Shop's fans, but I think many Hounds are more price-sensitive and maybe interested in knowing which places charge less -- as Troquet and Silvertone and others do, as a matter of philosophy and competitive differentiation.

                                                    In Chowhound terms, I'd argue that many places that are not "worth the price" manage to do quite well: they not only don't go out of business, they thrive. But I also think Chowhounds have a higher standard than the market: they neither judge places solely on value, nor are so impressed by intangibles that they entirely lose sight of value. My model merely aims put a hard number on the markup, one factor among many that sophisticated Chowhounds might use to assess the worthiness of a particular venue.

                                              2. Great conversation! This topic has so many aspects. Let me toss out one that I've noticed in my by-the-glass experience.

                                                Pours can really differ from restaurant to restaurant. At Troquet they offer a 2 oz. taste or 4 oz. pour. They have special glasses with stars for the staff to use as measures and therefore set good portion control. That alone may help them lower their mark-up on glasses.

                                                The pours by the glass may also differ from customer to customer. When you are a regular at a place like the Butcher shop, you may find more than 5 oz. in your glass from time-to-time-- especially with reds served in those large glasses. Or, the server may come by and dump the end of a bottle in your glass and not charge you.

                                                This may be condoned or even encouraged in some places and may be factored into the price per glass.

                                                When husband and I are at a place where we feel the price per glass is not in line, we order a bottle. Remember, in Boston, you can now have that bottle capped and sealed to take home with you. Has anyone tried this yet?

                                                2 Replies
                                                1. re: BostonZest

                                                  We recently took an unfinished bottle to go from L'Osteria in the North End. The server, who seemed nice enough but quite inexperienced in all areas of service, didn't know about the "seal and go" law. She went to the back and inquired, returning with a plastic grocery bag. She said, "They tell me all you have to do is wrap it up in this." It was all I could do to keep from laughing out loud, but lacking any better bag or method, it's what we did. We were a little concerned about getting stopped on the T with our open bottle of wine, but there were people on the train much drunker than we, so I guess we flew under the radar.

                                                  Now granted, L'O is not exactly known for their wine list or anything, but I thought it was a story worth sharing.

                                                  1. re: BostonZest

                                                    I've taken leftover wine in the bottle home from a few places; it's a great way to justify getting that second bottle when we only want another glass each. I've also taken home a bottle from a South End restaurant (identity withheld for their protection) where they did a L'Osteria-style grocery-bag wrap, not exactly up to the law's specs! With a quick VacuVin and storage in the fridge, reds keep just fine for another day or two (whites even longer).

                                                  2. What a fun analysis! I think using retail prices should incorporate the "other factors" you are talking about since the restaurants are paying wholesale prices which are 50-100% less than retail. Also, it is true that the markup of older, expensive wines is much less one of the key reasons being that the people who order those bottles have a very clear understanding of what it should cost and if it were too expensive would not buy it.

                                                    Troquet's approach to wine is one of my favorites in the city. I love the fact that several different wines (2 oz pours) during the course of my meal or just sitting at the bar.

                                                    TBS glass pours are typically generous but still do not make up for the fact that they are a bit overpriced. Keep in mind that Cat orders wine from vendors for all three restaurants and it able to get multi-case discounts (with some vendors) therefore he profit margin is higher.

                                                    All that being said, I have been able to try so many wines at both venues that i have purchased at retail. Were it not for these places and their extensive wines by the glass, I would never have forked over the $$ for a bottle.

                                                    1. There's been a lot of mention of how interesting wines should be worth an extra tariff insofar as markups are concerned. What does one consider an "interesting" wine?

                                                      3 Replies
                                                      1. re: limster

                                                        Limster,
                                                        Something that is difficult to get retail or maybe an obscure grape varietal you have never heard of. There are a lot of things that might make something an "interesting wine." Have you ever heard of a Gelber Muskateller or Furmint or perhaps Petite Arvine. These varietals to some might be known, but to most CH's i would say perhaps "interesting"

                                                        1. re: jpeso

                                                          Many thanks - that's good to hear.

                                                          To be honest, the part about the obscure varieties of grapes didn't even occur to me, so it's good for me that you brought it up. I was thinking about something else entirely, like trying to see how a great producer handles an off-vintage, wines made from grapes grown in land adjacent to those destined for grand wines, or a wine-maker adopting a style very different from his/her peers.

                                                          Given that hounds are rather independent thinkers and eaters with different ideas of what constitutes "interesting", I was wondering if different people had different things in mind when they used this to describe a wine or wine list in this discussion. Would be great to hear others from this thread chime in.

                                                          1. re: limster

                                                            those things that you mention also can make a wine interesting.

                                                      2. Wine by the glass has been a great profit center for restaurants for years. Basically, most restaurants price their wine as high as they think the market will bear... and "nightclubs" are much worse. There are two other things that bother me even more than the pricing issue...

                                                        Most restaurants serve terrible wines by the glass. Granted, the places you cited do a good job, especially Troquet (one of the city's best wine spots) but the majority serve inferior wines by the glass. I don't think that its been mentioned on this thread, but the pricing restaurants typically pay for their wines by the glass are even cheaper than you think. What drives the majority of restaurant WBG programs are special discounts that the distributors/wineries give restaurants for serving certain wines by the glass. There are two reasons they get better pricing.... 1. Wineries want their wines poured by the glass cause it showcases their wines and when people try them they are more likely to buy them in a retail store. 2. Distributors give special pricing on wines they want to "move".

                                                        The other thing that's annoying is that when ordering the more expensive WBG, often these wines don't sell as fast and therefore dont show as well as a fresh bottle does (even if the place has an elaborate storage system with nitrogen and the like). Champagne is even more susceptible to this, typically less desirable than what it should be.

                                                        So, unless its a place that I know does a good job with their WBG program, I take all the "negatives" out of the equation by ordering by the bottle. I get what I want, I know its fresh, typically the pricing is fairer, and I usually get a nicer glass to boot.

                                                        The wine "take home bag" law is a HUGE help in this regard.

                                                        21 Replies
                                                        1. re: WineTravel

                                                          I would have to disagree that restaurants pay 50-100% less than retail, i would say maybe 20%, or 30% on big case drops. If it were true that it was 50% - 100% less than retail then a $15 bottle would cost between $23 and $30 retail. It is true that the more expensive the wine on the wholesale cost that generally the markup is less. Could a restaurant really move a wine that costs $200 wholesale for $650 (which is what Slim suggests markup averages are), the answer is No, unless the demand is there. But generally as demand increases for a particular wine, especially producers the following vintages go up in price. Demand is generally what dictates what BTG prices are. Same thing happens with everything that has a low supply and a high demand, think playstation 3 or anything that is new and hot on Ebay.

                                                          WineTravel, Restaurants do not get favorable treatment direct from winery either in the way you mentioned in MA anyway. Here everything comes from distributors so they more or less control what is going on. Wineries might have good relationships with some wine personnel and offer other thinks like their own personal wine label, which often translate to being more expensive on a list due to their exclusivity.

                                                          1. re: jpeso

                                                            I have to agree: 100% off retail (free) is unlikely.

                                                            Note that I'm not extrapolating my findings to all restaurants. These are three specific Boston examples of by-the-glass pricing only. Also, I use typical retail prices -- not actual cost to the restaurant, which is invisible to me -- to arrive at a markup, as consumer prices seem the best readily-available basis for comparison.

                                                            I have always assumed that restaurants enjoy some discounts on wine vs. consumers, but I don't know how much. I'd speculate that locality, volume/cellar capacity, buying power (e.g., the leverage of a national chain), and other factors affect how much discount a buyer can achieve. This may be limited in Massachusetts by our notorious liquor distribution setup. In any event, confirming that restaurants do enjoy such discounts would only make the projected markups larger.

                                                            The eBay analogy on pricing seems somewhat limited: nobody bids on wines at restaurants against other consumers. I'll guess that wine pricing is more like consumer packaged goods pricing, an ongoing exercise in which restaurant management balances consumer price sensitivity (how much uplift it believes its target customers will tolerate), its own business and marketing strategy (e.g., whether its competitive differentiation hinges on more consumer-friendly wine prices), response to competitive pressures (like a new restaurant on the block), macroeconomic factors (e.g., recessionary pressures on consumer luxury-goods spending), changing consumer tastes (like fads in wine consumption), the needs of specific promotional campaigns (e.g., Restaurant Week), etc.

                                                            Incidentally, my preliminary research on bottle markups (which I didn't do much of) showed much smaller uplifts on pricier bottles. One example: The Butcher Shop's 1998 Valdicava Brunello di Montalcino, which it sells for $215/bottle, typically retails for $100/bottle. That's a mere 215% markup, less than half its average BTG markup. I imagine this markup shrinks further on more expensive bottles.

                                                            1. re: MC Slim JB

                                                              Ok, so i am no math genius, but what I was trying to say is that you will typically pay more at retail than the restaurants buy them for. In MA with the distributers setting the prices no matter who you are but giving 6+ cases discounts. A friend of mine lent me his Beverage Journal which lists all the distributers and prices. For instance, the Nino Franco prosecco that you list as $10 retail is $7 bottle wholesale. I am going to compile a list of the others so we can really see what the markup is.

                                                              The reason for glass prices to be higher is that the restaurant takes the risk of not selling off the whole bottle before it goes bad so they need to make their money back in the first glass which makes sense to me.

                                                              1. re: ghettochic

                                                                Excellent points, ghettochic: I'm glad to have confirmation that the figures I used tend to understate how much these places are marking up their wines. When I suggested that The Butcher Shop's markup on Nino Franco was only 450%, I was wrong: it's more like 643%.

                                                                I understand that the risks you talk about (not selling a bottle before it goes bad) explain why a restaurant might charge a higher price for a wine by the glass. But those risks the same for all restaurants.

                                                                I'm not questioning why retail prices for by-the-glass wines are higher than wholesale prices. I'm saying: Troquet gets a much smaller markup than The Butcher Shop for a similar glass of wine, in similarly posh surroundings, with similarly educated servers. Tell me, if you can, why The Butcher Shop's markups are three times Troquet's.

                                                                1. re: MC Slim JB

                                                                  Because they have a different business model.

                                                                  Troquet (and formerly Uva) has always aimed at the knowledgeable wine consumer who was interested in value, and often in unusual, or older, bottles. They try to increase profits by encouraging wine enthusiasts to drink more (and higher-priced) bottles by lowering the markups. Their wine list is a main draw of the restaurant - for a specific type of person.

                                                                  The Butcher Shop's business model appears to be the more standard one used in most restaurants - increasing profit by marking up the alcohol. This works with the vast majority of consumers who are not as knowledgeable about wine as Troquet's target. Some restaurants have lower food prices to draw people in (most people look at the food menu, rather than the drink lists), and make up for it by higher relative alcohol prices.

                                                                  Also note that the wines you selected from The Butcher Shop are much less expensive than those at Troquet. The average retail at The Butcher Shop was in the teens, compared to more than $50/bottle at Troquet. Low-end wines almost always have higher percentage markups than high-end wines because there are certain fixed costs associated with serving wine. As I recall, Troquet's bottle markup policy (at least when they started) was to add a relatively modest percentage of wholesale price plus a fixed amount per bottle - so less expensive bottles have a higher percentage markup (though a lower markup in dollar terms). So even at Troquet, the lower-priced wines are going to be worse values by your standards.

                                                                  As I said before, I think it's unlikely that every restaurant could succeed with Troquet's model. They succeed because they tap into a very specific (and somewhat limited) audience: the people who are interested in the $50/bottle retail wines, which is a much smaller group than those who drink $15-20/bottle wines. If too many restaurants had the same model, their target audience would be spread too thin. Now, another culture, where wine drinking is more pervasive, might support a much larger percentage of restaurants with low markups.

                                                                  Is Troquet a much better deal on wine than the Butcher Shop? Yes, especially if you are someone who really likes high-quality, more expensive wines. Is it a much better restaurant to visit? I suppose it depends on your priorities.

                                                                  1. re: overproofed

                                                                    The focus of my analysis was wines by the glass (not bottles), and I deliberately chose roughly representative and comparable price ranges at The Butcher Shop ($9.00-22.50 for 5 oz) and Troquet ($9.50-18.50 for 4 oz).

                                                                    I don't see the big emphasis on more expensive wines by the glass at Troquet that you're referring to, overproofed. Troquet's 4 oz pours range from $4.50 to $21.50, once you drop two high outliers (a $66 'Chateau d'Yquem and a $34.50 Krug Grand Cuvee Brut). Further, over 30 of its 45 wines by the glass (4 oz pour) are under $10.

                                                                    The Butcher Shop's 17 offerings by the glass are in the $8-22 range, with most in the $10-14 bracket. So I think I'm reasonably comparing apples to apples from a price perspective.

                                                                    If your point is that The Butcher Shop's wine costs are lower, because they are marking up far-less-expensive wines much more significantly, than I have to agree: that is in fact my major point, too.

                                                                    And while the "different business models" argument is an interesting and (I think) valid one, all it does is offer one more possible explanation as to why The Butcher Shop gets a 450% average markup vs. Troquet's 150% markup. Other explanations include: The Butcher Shop's rent and other fixed costs are much higher (doubtful, in my book); Lynch knows her fans will pay the graft and not squawk (highly probable); The Butcher Shop's customers don't know enough about wine to realize how much they're getting gouged (true for some but not all), etc.

                                                                    As a tight-fisted wine lover, it wouldn't make me any feel better to know that the reason I'm paying $14/glass at The Butcher Shop for a wine that commonly retails for $14/bottle is "that's their business model." From a customer perspective, that feels like a pretty weak justification. Stronger justifications for higher prices might include: more knowledgeable staff, more rare/interesting wines, better stemware, more convenient location, better atmosphere, better view, better food, and so on. But I'm not seeing enough of of these extras in The Butcher Shop's favor to justify its higher markups, hence my subjective assessment that Troquet is a good value and The Butcher Shop is a bad value.

                                                                    Once more, the cash outlay isn't the issue here: I'd be happy to plunk down the $66 for that d'Yquem (especially with Troquet's foie gras duo, mmmm). It's the unjustified (to me) difference in markups. Clearly, lots of folks think The Butcher Shop's markups are justified; I feel they aren't. For me to consider the markup worthwhile, to consider the place a good value, I need more/better reasons than, "This is how its owners have figured out how to make the restaurant profitable."

                                                                    1. re: MC Slim JB

                                                                      There's been a lot of discussion/analysis... but still say the basic concept practiced by most restaurants, even those discussed, is to charge the highest price they think the traffic will bear for their establishment... same way they price their food menu. It has little (directly) to do with their rent, salaries, etc. which does get factored in indirectly because typically those places that pay higher rent are generally the type of places that can get more for a glass of wine (typically higher end places). In addition, selections are very often made for WBG by what they can get "deals" on or incentives from the distribs (certainly within their parameters for what they want to serve)... even in the better places. Based on some of the comments on this thread, you'd expect that if the restaurant got a special price on a particular wine, they'd pass it along to the customer (ie. the % formula for pricing). Wrong, that doesn't happen. That "extra" coin goes right to the bottom line. There's nothing particularly wrong with this, just the business trying to maximize profits. Most restaurants do a poor job with their WBG because they dont have a lot of wine knowledge, are driven by what the distributor wants to sell and by the incentive deals. Most restaurants don't have a sommelier or wine buyer and in effect typically one distributor becomes the main supplier... so their "book" becomes the main source for the restaurant's wines. The 3 places youre highlighting are knowledgable about wines (the exception to the rule). Of the 3 places, Troquet has the best wine knowledge/pricing.

                                                                      1. re: WineTravel

                                                                        I absolutely agree, WineTravel, and have sugggested this several times throughout this thread as the most likely explanation for The Butcher Shop's 5X retail markups: it gouges that way *because it can*. Hey, and kudos to them for that: they are smart businesspeople. I'm just pointing out the elephant in the room.

                                                                        I think it's hilarious when people downplay or ignore the numbers because they "trust Barbara Lynch to take care of [them]". Sure, fella, and exotic dancers drape themselves on you because they find your conversation fascinating.

                                                                        I don't question anyone's right to deem The Butcher Shop a good value, as long as they understand how much more they're paying there compared to other places with similar virtues. Blind faith that a place must be a good value because it has a brilliant wine program manager seems a bit naive to me.

                                                                    2. re: overproofed

                                                                      I really enjoy this thread- I've been reading the Alice Waters biography, and one of the most interesting things that it shows is the way that the real price of wine vs food has changed over the past 30 years. apparently, the (inflation adjusted) price of a dinner at chez panisse has just about doubled since the 70's. in the same time frame, the wine prices have increased 500-600%. As a chef, this is an incredibly illustrative piece of history. The point is that in order to sell a beautiful, not puny, sustainably caught and carefully handled piece of, say, wild striped bass to a consumer, you're going to be looking at a portion cost in the neighborhood of at least $7 (that's if you're an awesome butcher, hold the applause). Presumably you're going to accompany this with some lovely vegetables, carefully cultivated by a thoughtful local farmer- another $3. And perhaps a drizzle of some artisanal olive oil, or perhaps a very special vinaigre de jerez, some fleur de sel? A couple more bucks. Then you've got to keep that fish in successive changes of ice (not free), pay the aforementioned $50/sf for your walk-in refrigeration, and pay the electric bill and the gas bill and trash removal and oil removal and equipment wear and tear and linens (because everyone knows that the best way to store fish is on cloth towels) and on and on and- oh yeah, pay your dishwashers and cooks their pittance for their 14 hour days and still have a little left over to pay your own rent (unless you're living on your banquettes-not uncommon), and at the end of the day, you're an asshole if you try to charge more than $25 for the dish. The fact is, that people are unwilling to pay a respectful, appropriate price for food, which forces restaurant to make their profits on....the booze. I hate it, too- I'd much rather see a $35 piece of fish and $4.50 glass prices for quality wines. I think that way we'd be respecting the amazing amounts of labor and care that goes in to producing our food properly, in a truly harmonious fashion, and at the same time be able to more fully integrate wine into our dining culture after the fashion of the europeans. but this is America, and the market talks. People want to pay low prices for heaping plates of food, and are willing to be suckered on their wine/cocktails to support the illusion that food is cheaper than it actually is. sigh.

                                                                      1. re: bosdine

                                                                        Yep, prices for rent, gas etc... have all gone up dramatically, but it's quite true that food prices haven't scaled proportionately.

                                                                  2. re: ghettochic

                                                                    As the New England Manager for Vin Divino, the company that imports Nino Franco Prosecco, please let me correct you. The wholesale price is not and never will be $7/bottle. The retail price is generally in the $15-$18/bottle range.

                                                                    Thank you.

                                                                    Marty

                                                                    1. re: martybmccabe

                                                                      Great info, Marty, thanks for posting it. At the time I did my research, it wasn't hard to find a bottle of Nino Prosecco at retail outside of MA for $10 (not $7 -- another poster quoted that figure). At the moment, it appears easier to find it (outside of MA) in the $11-14/bottle range, retail.

                                                                      So let's assume that The Butcher Shop pays $12 a bottle, which by my model makes their markup a mere 375%. That's still about twice what Troquet marks up its sparklers on average. But by The Butcher Shop's standards, that Prosecco looks like one of their better deals.

                                                                2. re: jpeso

                                                                  I can tell you that, in California at least, restaurants do get favorable pricing compared with smaller independent retailers. All end-users here benefit from volume discounting, where it is offered, but wineries like the visibility of being on restaurant wine lists, so they make it a little sweeter for them price-wise. They also like the fact that restaurants charge more for their wines than would a retailer. Further, if given the lower price, the more agressive retailers would lower their retail proportionately and undercut smaller shops and restaurant prices even more. So wineries and wholesalers often offer their best prices to restaurants. In addition, there are also specific wines that are sold only TO restaurants. That's another way for a winery to protect the pricing of small-production wines.

                                                                  I doubt, though, that any restaurant pays less for a discountable wine than a very large retailer who buys at pallet level pricing.

                                                                  1. re: jpeso

                                                                    jpeso, perhaps I wasn't clear on that. I wasn't suggesting that the wineries themselves deal with the restaurants... distributors at times offer discounts on behalf of the wineries... it gets passed through. I realize that you can't go around the distributor network, particularly in MA.

                                                                    I am saying that WBG programs can be very competitive... and weather the distubutor or the winery offers the discount... restaurants often get bigger discounts or incentives to place a wine by the glass. Not all wines, some. Often they have WBG "programs" and are offered to any restaurant that wants to serve that wine by the glass... at very attractive prices. It may include, a buy 3 cases get one free deal for examples. And of course there's the other angle where there are deals (specials) on wines they want to move... again offered to any restaurant.

                                                                    The 2 points are that markups are often higher than you think on some wines (even good ones) cause of the deals... and often restaurants serve "less and desireable" wines cause they pick wines soley because of the price/deal.

                                                                    1. re: jpeso

                                                                      A good wine store charges about 50%+ over wholesale per bottle. A lousy wine store charges more. So wholesale $30 equals about $45 retail. OR, wholesale is 2/3 of retail. Restaurants pay the same as stores. In Mass. the beverage journal every month lists about every wine from almost every wholesaler. The price is the price for everyone.

                                                                      1. re: eddb

                                                                        eddb: using your example, In Southern California a 'good' wine store will retail that $30 wholesale bottle for anywhere from $38 to $45, depending on their location, business strategy, rent,etc.. That's why wine retail is so challenging in any market with similar conditions. The small shop has to be sharp and pick their selections wisely.

                                                                        If that same bottle is more than $45 it does not necessarily mean the shop is 'not good', only that you will pay more there than necessary. There is a gourmet food market here that would routinely get $50 for that bottle. Their selection is terrific. They just feel they have a captive, wheel-heeled audience and can charge more, Same is true of an independent shop in a beachside town here with close to the highest average income in the state.

                                                                        "Lousy" is appropriate only in the sense that a wise shopper can do better if they so choose. And, at least here, restaurants do NOT pay the same as all stores. Restaurants often get lower prices as they are preferred by many wineries for high-end exposure and the fact that they will not re-sell the wine at the $38 price I mentioned above.

                                                                        1. re: eddb

                                                                          eddb: what you describe (wholesale + 50% = retail) is the OLD business model, and is based upon the [since outlawed] system of Fair Trade retail posting with the State of California's Department of Alcoholic Beverage Control, where -- indeed -- a wine with a $10 wholesale cost carried a posted retail price of $15, as an example, or a $20 wholesale bottle carried a $30 retail, and it was illegal to sell it below that price*.

                                                                          While this formula is still followed on some wines, or in some locations, many retailers use a much lower markup on a regular basis (i.e.: not just on sale items). And I am not just referring to places like Costco or Trader Joe's . . .

                                                                          Jason

                                                                          * The exception was when a case discount was applied.

                                                                          1. re: eddb

                                                                            I was a wine buyer for a retail store for a number of years. The typical markup for wine in that venue is 50% over cost (though sometimes less for very expensive wines or very popular mass produced wines). This price is based on distributor's listed price, the same for restaurants and retail. However, like WineTravel noted, very often the cost the retailer could be much less if your buy into deal (e.g., buy a case stack an place it by the door, or agree to buy some other stock that is not moving for the distributer). Restaurants actually buy into deals more often as if makes sense for a restaurant wine buyer to buy 10+ cases at a time. Also, if it is a well known restaurant, a distributer will cut the buyer a deal first to be able to advertise that they supply the restaurant and second knowing that people will try wine by the glass they typically won't buy by the bottle retail and hopefully seek it out later in the retail market. I guess the long and short of this post is that eddb and WineTravel are right to suggest that you may be vastly underestimating the markup in your calculations. For example,
                                                                            2005 Domaine L’Hortus Rose de Saignee $8/glass $14/bottle retail 5x8=40/14=286%
                                                                            could be $8/glass $14/bottle retail = 9.25 wholesale (or less) 5x8=40/9.25=433%

                                                                            1. re: tpapa2

                                                                              tpapa2, thanks for telling it like it is regarding pricing. The other point along the lines of "buying stock that is not moving"... is that many restaurants have a WBG program that is based a lot around these "deal" wines... which is also why often these WBG progams are terrible. [I should qualify that by saying that sometimes there are deals on wines that are good/expensive wines that are just not selling. Shrewd buyers can do well here w/o sacrificing their wine program. More often though restaurants are looking for "deal" wines meaning the "cheapest" wines]. I remember talking to an owner of a small chain of restaurants and I asked him what brand of vodka he poured in his well. His answer was, "Whatever's the cheapest".]

                                                                              Unless a place is really dedicated (not many are and it costs money to do it right) avoid WBG when you can and stick to halves and bottles. Of course many restaurants to a bad job in that dept too. I try to avoid those places... and when that can't be avoided, I'll just order a beer.

                                                                              Isn't is great when a place offers nice wines by the glass... also serves it properly (not opened too long and at the right temperature), gives the proper pour... and in a nice glass? Shouldn't be that hard, ya think? Charge what you want but do it right!

                                                                              1. re: WineTravel

                                                                                I've mentioned this before, but it's worth repeating.

                                                                                Back in the 1980s when I was the wine buyer for a wine bar & restaurant in Santa Cruz, CA, we had a wine list of 200+ tables wines, and over 20 wines available by the glass -- not including Porto, Sherry and Madeira.

                                                                                Our pricing policy was simple. We simply took the suggested retail price (based upon wholesale + 50% = retail; e.g.: $10 + 50% = $15) and added $5 to that and put the wine on the wine list. Everything on one wine list was a flat $5 over the suggested retail price. (Today, I'd increase that to $10.) That meant that the more expensive a bottle was at retail, the better buy it was on our wine list. $75 retail? $80 on our list!

                                                                                For our by-the-glass selections (limited to table wine and sparkling wines), we added tax to the wine list price, divided that by five, rounded up to the nearest nickel, and poured six 4-oz. glasses per bottle.

                                                                                So, by way of illustration:

                                                                                $20 wholesale + 50% ($10) = $30 retail
                                                                                $30 retail + $5 = $35 on the wine list

                                                                                $35 + sales tax (8.5%) = $37.98
                                                                                $37.98 / 5 = $7.596
                                                                                That bottle would sell by the glass for $7.60

                                                                                At $35 per bottle, this bottle would return $15 beginning gross profit, or 42.9%.

                                                                                At $7.60 a glass, this bottle would return $22.03 beginning gross profit, or 47.6%.

                                                                                True, a bottle with a retail price of $75 that sold for $80 on our list would only return, as a percentage, 37.5% -- but in real dollars, that was $30.

                                                                                It all worked out.

                                                                              2. re: tpapa2

                                                                                >>> Restaurants actually buy into deals more often as if makes sense for a restaurant wine buyer to buy 10+ cases at a time. <<<

                                                                                This only makes sense if the restaurant a) has a wine list/by-the-glass program that is large enough, or has a quick enough turnover, that can USE 10 cases --even assorted -- at a time; b) has a storage area large enough to accomodate the backstock.

                                                                                I cannot speak specifically to Massachusetts, as most of my 35 years ITB have been in California. However -- at least in California -- although the "case one" wholesale price (i.e.: that price offered prior to the application of any post-offs and/or discounts) of Chateau Cache Phloe Chardonnay will the the same to the retail store and to the restaurant, there will often be discount programs available for "by-the-glass promotions" whereby the restaurant may get the same discount on, say, three cases that the retail store would get if they bought 10 . . . or that, if the restaurant commits to buying a pallet (56 cases) in, say, 5- or 10-case drops, they will get a much deeper discount than a retail store possibly could as a part of a family plan (or even a stand-alone plan) of 100+ cases.

                                                                                Additionally, there are often "unadvertised" discounts available to onsale accounts. For example, rather than the standard discount structure of 5% off on 5 cases, 10% off on 10 cases, and 15% off on 25 cases offered to retailers, restaurants may get 5% off on 3 cs., 10% off on 5, 15% off on 10.

                                                                                Not to mention, some wines are available only to onsale accounts.

                                                                                In jurisdictions that permit it, "pool buys" can take place, where -- for example -- orders can be combined among several different retailers to get "truckload pricing," but -- generally -- restaurants are not a part of this.

                                                                                Again, this applies to California, not to Mass.

                                                                                Jason

                                                                        2. Maybe restaurants might be better off with larger selections of half-bottles instead of so many choices available by the glass.

                                                                          1. "Troquet: a shockingly low 140 to 160% markup (example: 2001 Rafanelli Zinfandel $11.50/4 oz glass, which works out to $69/bottle vs. a typical $50/bottle retail price. $69 divided by $50 = 140% markup)."

                                                                            Sorry, isn't the $50 to $69 markup 38%? Wouldn't a $50 bottle marked up 140% cost $120?

                                                                            19 Replies
                                                                            1. re: Sam Fujisaka

                                                                              I think what you're saying here, Sam, is that the correct definition of the term "markup" is cost divided by (price minus cost), not what I used, price divided by cost, where "price" is what the restaurant is charging for a glass of wine, and "cost" is what a consumer typically pays for that same glass at retail. Please forgive the ignorant use of terminology, though I think defined my terms and methodology pretty clearly up front.

                                                                              I used the consumer retail price because it's publicly available/verifiable, instead of the restaurant's actual cost, which (though probably significantly lower) is not publicly available/verifiable.

                                                                              I chose my definition of "markup" because it seemed easy to understand: comparing what the restaurant was charging for a glass of wine against what a consumer would pay for it at retail. (Also, the math was simpler.)

                                                                              Feel free to suggest a more appropriate term than "markup" for the metric I used here -- maybe "restaurant price to consumer price ratio (RP/CP)"?

                                                                              1. re: MC Slim JB

                                                                                Bounceable as not having anything to do with wine, but.........I spent 30 years in the retail and wholesale clothing industry and Sam's word 'markup' is what I always found used to describe the percentage of the SELLING price which is gross profit.

                                                                                In researching it, though, I've found references to the word 'markON' used in this context. Sometimes it is said to be a synonym for mark-up, but I've also seen texts that say what I always called markUP is really called markON. MarkUP, then, is the expression of the percentage of the COST represented by gross profit. (ie- $20 sell/$10 cost; $10 profit is 100% mark-UP on cost). The diffrence is whether you're expressing the profit as a % of the cost or of the sell price.

                                                                                I got into this as the result of this very same topic on another wine group. I never did figure out whether the different names are the result of usage in different industries.

                                                                                1. re: MC Slim JB

                                                                                  Hey, there! While I'm new to this board, not new to the scene. I almost think this talk is irrevelant. Don't all us Bostonians go to Fenway and experience the all time rip-off of a Bud Light and Fenway Frank? Seriously, how can anyone honestly discuss value of wine and mark up in a town that WE ALL pay $6.50 for a Bud Light? Now I didn't do all the math, and it was many years ago, but I once drank keg beer. What would that mark up be? Being a business-woman, if you can command a premium for your product, wouldn't you be a chump not to take advantage..... a la Fenway Park? Business is business. Restaurants are lucky to pay their accounts on time, never mind pay back "friendly money" or investors. A successful restaurant doesn't necessarily pay high salaries in Boston. To last, you simply pay your bills. Being in a different business these days, I condone places that can create a demand for their product plus expertise and place my value on that.

                                                                                  1. re: kohlrabi

                                                                                    kohlrabi... that was the most brilliant comment on this thread yet. THANK YOU!!!!!
                                                                                    glad we have a few on here that get it

                                                                                    1. re: kohlrabi

                                                                                      I absolutely agree with you on most of this, kohlrabi: I too give Barbara Lynch credit for getting all she can, for charging whatever the market will bear. That's just good business. There clearly are plenty of "total packages" for which we gladly pay a much greater markup than we normally would because we think it's worth the intangibles, it's a unique experience with no real local competition (like Fenway, the only place in town to enoy a beer with a live major-league baseball game in front of it), and so on.

                                                                                      But I don't believe a discussion of markup is completely irrelevant. I think one part (though hardly the only part) of being a Chowhound is being able to intelligently assess value in quantifiable ways where we can, instead of just swapping our subjective, qualitative impressions of places. Value is in the eye of the beholder, but I still think you can be a smart shopper, and share hard numbers where available as one way of weighing value. Understanding how much the markup is can help you decide whether the intangibles covered by that markup are really worth it to you.

                                                                                      I spend an inordinate amount of my disposable income on dining out, but I'm not independently wealthy. I still need to make my dining dollars work to get the maximum pleasure out of them. I routinely make internal assessments of whether a place is worth the money to me. Obviously I'm not spending the meal counting every dime, but afterwards, I do wonder: was that enough fun, joy, excitement, quiet satisfaction, etc., to be worth coming back and dropping another $20, $30, $50, $100, $200 there, rather than some other restaurant?

                                                                                      Clearly there are folks here who would rather not think about this aspect of the dining out experience, or are so in love with their favorites that they shut out any criticism of them, or are wealthy enough not to care. But I think a lot of Chowhounds intuitively understand that being value-conscious, identifying places that deliver better value for similar experiences (a scale which varies for each individual), means they can get more enjoyment for their hard-earned dining dollars.

                                                                                      This whole wines by-the-glass markup discussion is merely one factor of many I use in assessing value. Note that I still patronize The Butcher Shop regularly, have things I like about it. But I would probably give it more of my business if I didn't feel they were kind of pushing it on that particular score. These aren't black-and-white, absolutely-love-it-or-never-patronize-it decisions to me.

                                                                                      As you can see from posts here and elsewhere, many people have no problem with those prices, and hit The Butcher Shop multiple times per week. My goal here was to try to provide a better understanding of how much of a premium you pay at different places for a glass of wine. It's totally your call as to whether it's worth that premium to you. To me, not considering value is a luxury I can't afford. This "consumer cost vs. restaurant price" model is simply one more tool of many I use when considering a restaurant's value.

                                                                                      1. re: MC Slim JB

                                                                                        I hear you, but iI think that putting so much emphesis on mark up diminishes the value of the whole too much. If I am out trying to maximize my dollar, I'm really not looking to spend $16 for a glass of wine, right? I think that most mark ups are on the higher priced items, correct? The price alone will deter me whether a value or not. How often is it that a $5 bottle of wine is being sold for $8 a glass. What I'm trying to say is that maybe the mark up is there for those who are willing to pay. When I last visited Eastern Standard, they have more than 4 glases of rose at $8 a glass. It is up to the consumer to figure out which is the better value. Or maybe not.. which ever one tastes best to you is worth the $8 bucks.

                                                                                        1. re: kohlrabi

                                                                                          I think what's really obvious from this thread is that different folks have different value systems and will calculate whether something is worth the price or not in their own way. I agree the markup is there for those who are willing to pay, and I think some people won't be willing to pay if they feel that they can buy that wine retail for x% less; obviously different folks will have a different value for x. On the other hand there will be others who will be willing to pay, provided that the wine suits their taste or complements the food they were having. I've maximized my dollar by getting bottles that cost more than $100, so I think that that happens at all price ranges, not just at the low end.

                                                                                          1. re: kohlrabi

                                                                                            "If I am out trying to maximize my dollar, I'm really not looking to spend $16 for a glass of wine, right?"

                                                                                            Actually, at least in my case, this is not true at all. I have no problem spending $16 on a glass of wine, do it all the time. I think $66 for a 4-oz pour of '96 Chateau d'Yquem at Troquet is a great deal. I'm not looking for "cheap": that would make for a very short discussion. But whether I'm spending a little or a lot, I do consider how much of a premium I'm paying above cost for that value.

                                                                                            "I think that most mark ups are on the higher priced items, correct?"

                                                                                            In one sense this is true, but not the sense I'm looking at. Consider a $2 (consumer cost) glass of wine sold for $10, and a $3 wine sold for $15. The first is marked up $8, the second, $12. $12 is indeed more than $8, but in terms of markup, they are exactly the same: 5 times cost. That's the issue I'm considering here: the markup multiplier, not price minus cost. One interesting thing revealed by my research is that, with few exceptions, each restaurant marks up its wines by the glass by roughly the same factor. At The Butcher Shop, it's about 4.5x, at Troquet, about 1.5x, at Coda, about 3x.

                                                                                            "What I'm trying to say is that maybe the mark up is there for those who are willing to pay."

                                                                                            Agreed. The Butcher Shop's devoted fans here appear to have no problem with paying roughly 5 times cost for wines by the glass there. My point is, "Some places charge a lot more for the intangibles (everything besides the cost of the wine) than others." A lot of things, mostly subjective things, go into assessing value. My calculation of markup factor is a rare quantitative thing among those qualitative things (e.g., how much you enjoy the ambience) that you may use to help you assess value.

                                                                                            "...which ever one tastes best to you is worth the $8 bucks."

                                                                                            Well put. But there are two issues implicit in this statement. #1 is the "quality" of the wine, a highly subjective assessment that varies by individual, and a completely separate issue from my discussion here. #2 is whether it is "worth" the $8. That particular glass of wine, served at two places, has the same quality. But if it is served at one place for $8 and another for $14, I have another decision to make: are all the intangibles beyond the wine's quality (ambience, proper wine service, etc.) worth the extra $6 at the second place? Understanding cost and markup is just one more tool to help make this second assessment.

                                                                                            Again: markup isn't not the only thing, nor even the most important thing to consider when assessing value. (I ignore what I'm spending when I'm enjoying a meal: it's only later, when the AmEx bill comes, that I take out that particular yardstick, to consider whether I should return.) But it's one facet of value we don't scrutizine much here, and I thought would be interesting to shed some light on it.

                                                                                            I think it's odd how some people have read this as attack on The Butcher Shop, a place which, despite the analysis I've presented here, I still patronize regularly. But having done the research, I suspect I'm more likely to order bottles there in the future.

                                                                                            1. re: MC Slim JB

                                                                                              "I think it's odd how some people have read this as attack on The Butcher Shop, a place which, despite the analysis I've presented here, I still patronize regularly."

                                                                                              Of course some feel that you're attacking TBS, it's the only establishment you've bothered to call out. I realize that it's tiresome to be so thorough, ("I had started on some bottle pricing analysis, too, but I abandoned it: too much work") but if you are going to post on a subject that will ultimately affect the business of a restaurant, do so with some sense of credibility ("My methodology is admittedly rickety, but it’s the best I can come up without the benefit of insider information." ) You don't need insider information if the basis and benefit of your 'research' is at the consumer level, which this is. But, if there are other restaurants whose mark-ups are out of line in terms of value, then lets look at those too. My point is, you opened one small can of worms (with a pocket knife, no less) and we're micro-examining one small piece of a larger industry. For whose sake? So you can pat yourself on the back for 'unveiling' hypothesized mark-ups at three restaurants, out of thousands? What do you think the consequences of a post like this are? Raising a question is different than pointing a finger.

                                                                                              Don't forget for one second how often you post on this site, and how you may come across to some as having some sense of authority; whether in opinion, fact, or in the fact that you sometimes edit this site as well. Your information and hard numbers married with 'rickety' research are no doubt going to skew the people who read this site, especially the uninformed who take your word as gospel.

                                                                                              1. re: aperitif

                                                                                                I don't edit this site. I have no official connection with Chowhound. I'm just another amateur poster here, though obviously a more frequent one than most.

                                                                                                The reason I chose The Butcher Shop was some Hounds who vehemently objected when I said (in another post) that I thought its wines by-the-glass were "overpriced". "Fine," I said, "Let's examine my impression on a basis that doesn't rely entirely on subjective markers: instead of 'overpriced', let's consider 'more highly marked up relative to others'". I chose Troquet because I consider it a similarly high-end, wine-focused place whose wines BTG struck me as less highly marked up. Coda I threw in there because I admire its low-end-focused list, and thought it would be fun to include.

                                                                                                The consequences of this post, I think, are like any on Chowhound. Some people will consider it, others disregard it. While I doubt it will register as even a flicker on Barbara Lynch's bottom line, I don't think any open discussion with a basis in verifiable facts should be muzzled in the interest of protecting a restaurant's interests. Are you saying that if I can't do a comprehensive survey of every place in town, I shouldn't make an observation about a few particular places here? Or that I should never offer anything up that might be read as critical of a place, because it might be bad for their business?

                                                                                                I have no control over how much trust a reader puts in my opinions, but I'm pretty sure that for every Hound that lends my posts credibility, there are more who think I'm full of it. I have never made claims to authority of any kind. As I said in the original post, I welcome any refinements or alternative analyses anyone would like to propose. But I'm not simply advancing opinions here, nor challenging anyone's right to assess value any way they choose. I'm presenting some widely-available, verifiable data to support some general observations. If you've got contrary facts to present, by all means do so. If you think a broader examination of other restaurants' wine pricing policies would shed some light on the discussion, feel free to do some legwork.

                                                                                                But please don't get upset with me if the numbers I've presented reflect unfavorably in some way on a place you like or have an interest in. And don't mistake my being critical of one aspect of a place as a recommendation that you never go there. The ultimate point isn't about the three places I've chosen: it's about adding another tool for assessing value, one that's less subjective than most. It can be applied to any restaurant. I would love to see other Hounds apply this same model to other places.

                                                                                                1. re: MC Slim JB

                                                                                                  a lot of us here don't have the time to spend with a caluculator in hand trying to determine the value or "mark up" of restaurants...

                                                                                                  the overall fact is you have spent an exorbitant amount of time talking around in circles just to say what i did in the begining.
                                                                                                  you cannot be the judge of a certain wine at tbs. you can however express your opinion.

                                                                                                  1. re: bowmore36

                                                                                                    Actually, bowmore, you appear to still be responding to that earlier thread, the one where I said, "I think TBS' wines BTG are overpriced", and you said, "No, they aren't." In this one, I'm trying to shine some light on an aspect of wine pricing that isn't so subjective. I've moved on from the subjective notion of "overpriced or not" to a different one.

                                                                                                    I'd welcome some further insight from you on this new topic, since we exhausted the possibilities of "Is overpriced" vs. "No, it isn't" the last time around. Surely you, a self-styled wine expert, have something more relevant to add to this topic than continuing to say, "No, it isn't."

                                                                                                    1. re: MC Slim JB

                                                                                                      the reason i "appear" to be responding to the earlier thread is because i am. you have yet provide a particular example of another wine from the same region or perhaps the same varietal or anything similar that one could compare the original 18 glass to. i havent seen that information. .... thank you for providing us the figures. however this thread was moved from the boston board in which you proclaimed that an 18 glass was overpriced. have you provided any information other than wbg pricing in different restaurants? this all makes no sense!
                                                                                                      i have yet to say that i am a wine "expert" (please point out where i have) however, having knowledge on the subject, i questioned your "expertise" on this subject and you have basically thrown a bunch of jargon and figures out to muddle the initial claim.
                                                                                                      i choose to use less words (because i am not as eloquent as a part time writer for a beat magazine as yourself) to get directly to the point.

                                                                                                      what exactly would you like me to add??? i can dig up facts if you want. but my reason (yet again) for discounting your comment was to show that it is subjective and its not about math. please at least try to provide something to help me out here!

                                                                                                      1. re: bowmore36

                                                                                                        It sounds like both of you want to use different criteria for calling something overpriced. MC Slim JB wants to use the markup (comparing price at the restaurant to retail price; relative to the average markups in other restaurants), whereas bowmore36 wants to use the properties of the wine such as taste, varietal, region etc.... We don't expect all hounds to think the same way, and we expect all of you to make up your own mind. We think it's time to agree to disagree and move on.

                                                                                                  2. re: MC Slim JB

                                                                                                    Why does this review of The Blarney Stone in the Dig say that you are a Chowhound Editor?????????

                                                                                                    http://blarneystoneboston.com/html/pr...

                                                                                                    1. re: BostonBarGuy

                                                                                                      The Dig has never described me as such. The description "Chowhound Editor, Freelance writer for The Weekly Dig" was presumably inserted by The Blarney Stone's webmaster; it wasn't part of the published article.

                                                                                                      (The Dig's new website hasn't restored its back issues online yet, but I can send a scan of the original print-edition article cited, a roundup of Dorchester restaurants, to anyone that wants it: see my profile for my email address.)

                                                                                                      I can only imagine that The Blarney Stone means to say I'm a Chowhound contributor, or doesn't understand the difference between an editor and an amateur contributor.

                                                                                                      I expect the Chowhound Team can confirm that I do nothing but contribute amateur posts here. I would think that working as a Chowhound editor is a full-time pursuit in itself, and I already have a day job quite unrelated to the restaurant industry and media that covers it.

                                                                                                      My freelancing for The Dig and other pubs is an avocation. I had never actively sought to be a food writer. The way that local Food/Drinks editors discovered me was from reading my posts here; the way they solicited me as a potential contributor was by contacting me at my Chowhound-listed email address.

                                                                                                      1. re: MC Slim JB

                                                                                                        MC Slim JB is not now and has never been a Chowhound moderator.

                                                                                                        We refer to members of The Chowhound Team as moderators, not editors, as their role is not to edit individual posts (as a matter of policy, we don't edit posters' words without permission from the poster). We do move and remove entire posts in order to foster friendly, honest, discussion that's focused on chow.

                                                                                                  3. re: aperitif

                                                                                                    I considered your points some more, aperitif. I started out with some tentativeness ("rickety", etc.) about my methodology, waiting for folks to poke holes and uncover flaws, but it looks to me like the analysis has essentially held up. As I expected, people found some outliers on retail prices. But no one has managed to demonstrate that the numbers are completely off base. Where it might be skewed -- like the fact that restaurant costs are actually lower than the consumer retail prices I used -- the analysis skews the same way for all restaurants, so it's reasonably fair.

                                                                                                    So if the methodology is reasonably sound, your questions about "fairness" to The Butcher Shop remain. If it is verifiably true that TBS enjoys these margins on their wines BTG, how is talking about it here unfair to them in any way? Assigning value to their markups is an individual Hound's choice to make, and clearly the crowds packing TBS every night have decided, "It's worth it." If you looked at TBS' markups as revealed here and say, "Damn, those are high for what they offer," aren't you glad to have this information?

                                                                                                    Regarding my purported "authority", I think you're giving Hounds too little credit. One things that attracts folks to this site is their anti-authoritarian tendencies, a disdain for old-media restaurant critics and self-appointed tastemakers. There's always reasoned (and occasionally unreasoned) dissent to my posts: I don't see the uninformed folks taking my word as gospel here that you do.

                                                                                                    Regardless, any place that can't sustain the scrutiny of numbers or welter of opinions expressed on Chowhound won't survive, anyway. I don't think Chowhound postings directly affect a restaurant's performance, but they often accurately reflect/predict it. I expect The Butcher Shop to continue to thrive, despite the unflattering light I've shone on one small aspect of its value proposition here. The market always speaks far louder than any one Hound can.

                                                                                                  4. re: MC Slim JB

                                                                                                    MC Slim JB --

                                                                                                    >>> In one sense this is true, but not the sense I'm looking at. Consider a $2 (consumer cost) glass of wine sold for $10, and a $3 wine sold for $15. The first is marked up $8, the second, $12. $12 is indeed more than $8, but in terms of markup, they are exactly the same: 5 times cost. That's the issue I'm considering here: the markup multiplier, not price minus cost. <<<

                                                                                                    I agree with your comments here, but I feel I would be remiss in not referring to my earlier post. At some point, looking at percentage markups makes no sense (at least to me, but then I'm in California -- whatever that means -- not Massachusetts). After all, do you really mark up the bottle on the wine list that costs the restaurant $25 the same percentage as you do the bottle that costs $250? (And if you do, just how many of the latter will you sell?)

                                                                                                    Back in the days of "house wine," I got more than one restaurant to switch from 18-liter boxes/kegs of wine (that cost less than 3¢ per ounce) to 750ml bottles of imported Chardonnay that cost 10¢ an ounce -- yes, it blew the heck out of the restaurant's percentages on their spreadsheet, but the improved image gained by the restaurant by pouring Chardonnay from the Alto-Adige for their house wine instead of a generic California Chablis from Gallo, Summit, Master Cellars, etc. more than made up for it. Besides, making $3.60 profit on every glass of house wine (versus $3.28) is pretty much a wash, don't you think?

                                                                                                    Jason

                                                                                        2. I've worked in the restaurant biz for many years and a general rule (very general) in many restaurants is that the per glass price is close to what the restaurant paid for the bottle. Of course, in finer wine bars and restaurants I'm sure that rule isn't applicable. Interesting analysis... nice work.

                                                                                          1. Again, rather than argue back and forth about how much a particular wine costs and the percent profit (we all know they make a killing on WBG... what's the difference what the actual percentage is). MC Slim JB's excercise was just to quantify the point and to have a little fun. Im always interested in what he has to say.

                                                                                            The bigger problem is that most places, driven by profit and lack of wine knowledge, pour crap by the glass.

                                                                                            3 Replies
                                                                                            1. re: WineTravel

                                                                                              exactly winetravel....
                                                                                              most places do not have the knowledgeable servers and continue to pour crap by the glass!!!!
                                                                                              another reason why tbs should not be criticized for being "overpriced"
                                                                                              the original point still has not been "qualified" and that is what basis is the 18 dollar glass overpriced? i'm still looking for that answer!!!! someone help me!!!

                                                                                              1. re: bowmore36

                                                                                                You can feel that an 18 glass is "overpriced" if its a wine that's mediocre. That said, who cares? If I want it, I order it. Just like an $80 steak or a Mercedes. This point was covered before earlier. The thread is just getting repetitive at this point. Like I think MC Sim said somewhere along the line... is what they charge at Fenway Park for a water ($4 +) for a bottle they pay 18 cents for overpriced? Sure, but we still buy it. They, just like a restaurant, charge whatever they think people will pay. The market dictates the price. An $18 glass of wine is what it is. Some $50 glasses are good values... some $9 glasses are not.

                                                                                                Lets just hope the QUALITY of WBG programs get better! They can charge what they want. The market will dictate if its the right price or not.

                                                                                                1. re: WineTravel

                                                                                                  winetravel... agreed again thank you.

                                                                                                  what specific places have quality wine by the glass programs?