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East Bay restaurant wine markups

michaelw Oct 7, 2013 04:46 PM

I've just begun to start a google spreadsheet with restaurant wine markup calculations. So far a friend and I have done pinot noirs at Rivoli and Bay Wolf. Both these places are marking up by less than 100% (based on average prices from wine searcher), often substantially so, which seems incredibly reasonable especially compared to many places in the city. Before I get carried away with this project, has anyone else already done this? Or are there any thoughts about especially good and well-priced wine lists, or the contrary? I haven't entered the data yet, but it seems that Commis and Wood Tavern are also good values (which is, I hasten to add, different than low-priced, at least for me).

  1. Robert Lauriston Oct 7, 2013 05:27 PM

    I check markups that way all the time, though I don't keep track of them.

    Typical markups around here are 1.5X wholesale for retailers and 3X for restaurants, so restaurant prices are often 2X undiscounted retail prices. However, for more expensive wines, some restaurants will reduce their markup, since they're still making a nice profit per bottle. Also, they may not mark up wines that have been in their cellar for a while to keep pace with the latest retail prices.

    9 Replies
    1. re: Robert Lauriston
      Mike C. Miller Oct 7, 2013 05:56 PM

      I don't live here but visit frequently. Robert makes an excellent point. Markup often differ substantially by price level. If your looking at a domestic wine that retails for $25, it's frequently seen in the $50-75 range. But if you're looking at a good 1er Burgundy from a top producer that retails for $225, you're not as likely to see a 100-200% mark up. (Maybe $350-375?). You really need at least a couple of price benchmarks to do justice to your project.

      1. re: Mike C. Miller
        Robert Lauriston Oct 8, 2013 09:25 AM

        I don't see bottles that list for $25 retail going for $75 in restaurants in the East Bay. if you find a 3X difference between retail and restaurant, you're probably looking at a heavily discounted bottle on the retail side.

        1. re: Mike C. Miller
          michaelw Oct 8, 2013 11:10 AM

          So far I also don't see this level of markup. From what little I've done so far, there isn't much consistency. I haven't looked into the really high end wine you mention. Some examples:

          At Bay Wolf
          2010 WesMar “Balletto Vineyard,” Russian River sells for $92 and retails for $42, a increase of 2.2x. Then at the low end, the 2010 Au Bon Climat “BayWolf Selection" is $38 vs $21 at retail, an increase of 1.8x.

          At Rivoli there appears to be an extraordinary bargain on the 2009 Kistler Vineyards Sonoma Coast Pinot Noir which, at $95, is well below it's retail of $130.

          My impression so far is that you just need to check the individual wines and that you can't rely on rules of thumb regarding overall restaurant practices or markup by price.

          1. re: michaelw
            Robert Lauriston Oct 8, 2013 12:21 PM

            What are you using as the retail price for the house-labeled wine?

            Older wines may be marked down because the sommelier thinks they're declining, not good values compared with other bottles on the list, or not well appreciated by customers.

            1. re: Robert Lauriston
              michaelw Oct 8, 2013 12:30 PM

              I'm using the average price from wine searcher. Interesting point on the older wines. Seems obvious in retrospect, but I'd not thought of it.

              1. re: michaelw
                Robert Lauriston Oct 8, 2013 12:34 PM

                I don't find any Baywolf Selection wines on winesearcher.com.

                1. re: Robert Lauriston
                  michaelw Oct 8, 2013 12:51 PM

                  You're right, but it is listed with the Santa Barbara designation (forgot to include that part). I don't know what "Baywolf Selection" means.

                  1. re: michaelw
                    Robert Lauriston Oct 8, 2013 12:56 PM

                    Baywolf Selection would be a house-labeled wine which might or might not also be sold by Au Bon Climat under its own label. I'd guess that it's the same as house-labeled ABC wines at other restaurants, but that's not necessarily the case either.

                2. re: michaelw
                  Robert Lauriston Oct 8, 2013 12:39 PM

                  Although when a restaurant is selling a wine for less than the current auction price minus commission, I suppose another possible explanation is that it's a loss leader to attract savvy wine-drinking customers.

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