We all know that a bottle of wine at a restaurant is substantially more expensive than at a retail store. I use the example of a restaurant wine list in my pricing class to motivate varied concepts, from extremeness aversion to product-line pricing to price discrimination. But just how expensive are the wines at Nashville restaurants? The following attempts to answer this question. Sleep-inducing methodological details are provided for the overly-curious at the bottom.
I selected restaurants with online wine menus. From each menu, an average of 20 bottles were randomly selected, representing reds, whites, and sparkling wines at a range of prices. Additionally, some common wines were used as controls (a majority of restaurants have Conundrum and Veuve Clicquot Yellow Label, for example). Prices are relative to national median retail prices.
In short, Café Margot is the best deal in town and Acorn has the dubious distinction of being worst, by a comfortable margin.
This is not intended to be a ranking of a wine list's or restaurant's quality or its service. It is the adjusted ratio of the price of several random bottles of wine to their national retail averages. No more. Also, restaurant wine prices in Nashville include 9.25% sales tax and 15% liquor tax, and retail wine prices in Nashville are quite high (curious why?). Therefore, while a ratio of 200 implies twice the national median prices, it will be a substantially lower markup over local retail wine prices. Markups in the table below refer to markups over national retail prices, not the restaurant's markup over its cost.
| Nashville Restaurant Wine Prices | ||
|---|---|---|
| Restaurant
Notes, link to wine list |
bottles (by the glass) |
Price Ratio (lower is better) |
| Café Margot | 116 (16) | 186 |
| Great bargains throughout the list, but the best are in the higher-end reds, which rival retail prices. [list (pdf) found here $28-$135] | ||
| J. Alexander's | 78 (27) | 193 |
| Cheapest Conundrum of any list at $40. Lowest-priced wines have high markups, but the $40+ range is great. [list (pdf) found here $26-$65] | ||
| Tin Angel | 78 (27) | 204 |
| Large variance, with some great bargains mixed in with less favorable markups. [list (pdf) found here $26-$75] | ||
| Flyte | 103 (90) | 209 |
| Fairly consistent pricing. The $50-$60 range has the lowest markups. Upper-end sparklers have the highest. [list $24-$110] | ||
| Valentino's | 145 (15) | 216 |
| Very large variance in markups, ranging from about 20% to nearly 300%. [list (pdf) found here $27-$230] | ||
| P.M. | 22 (12) | 220 |
| Best Veuve Clicquot price at $80. Very reasonable given that lower-priced wines are usually the most marked up. [list $27-$30] | ||
| Mirror | 23 (17) | 222 |
| Small, unpretentious list with reasonable prices on lower-priced wines. [list $25-$42] | ||
| Old Hickory Steakhouse (Opryland) | 160 (20) | 225 |
| Highly variable pricing, ranging from 50% over retail to well over 300%. [list (pdf) found here $34-$200] | ||
| Old Hickory Steakhouse (Gaylord Orlando) | 114 (25) | 228 |
| NOT IN NASHVILLE [list (pdf) found here $47-$490] | ||
| Ombi | 45 (24) | 228 |
| Strangely, the better deals are on several under-$40 wines. [list $32-$80] | ||
| Watermark | 380 (33) | 232 |
| Some of the lowest Nashville prices on several $30-$60 wine-list staples. [list (pdf) found here $32-$300] | ||
| Tayst | 78 (24) | 237 |
| Fairly consistent markups across the list, and lowest prices on several champagnes. [list $32-$135] | ||
| Bound'ry | 222 (44) | 239 |
| Eclectic pricing with some of the best deals alongside some of the worst markups in Nashville. A few very good bargains at the high end. [list $26-$250] | ||
| Carraba's (Nashville & Cool Springs) | 37 (30) | 241 |
| Highly variable markups. [list (pdf) found here $20-$42] | ||
| Yellow Porch | 54 (36) | 243 |
| Fairly consistent pricing. Mostly common wines, all priced in the middle of Nashville range. [list $26-$64] | ||
| Rumours | 75 (74) | 247 |
| A couple of bargains in the $60 range offset some 200% markups n the under-$40 range. [list (pdf) found here $26-$60] | ||
| Amerigo | 53 (29) | 247 |
| No real bargains under $80, but a couple of high-end wines rival retail prices. [list $26-$65] | ||
| New Orleans Manor | 37 (21) | 250 |
| Damning a nation with faint praise, the list featuress Blue Nun as "Germany's most famous wine, Soft and mellow with a natural sweetness." [list $22-$49] | ||
| F. Scott's | 270 (40) | 251 |
| Very deep list, but what it has in common with other Nashville restaurants is usually priced higher than the competition. [list $30-$475] | ||
| Mafiaoza's | 129 (62) | 251 |
| Reasonable prices. No real bargains, but nothing outrageaous, either. [list $22-$135] | ||
| Caffe Nonna | 34 (23) | 251 |
| Top half of the list is pretty reasonable, while on the bottom half of the price range, 200% markups are the norm. [list $29-$57] | ||
| Sunset Sam's (Gaylord Orlando) | 42 (29) | 254 |
| NOT IN NASHVILLE [list (pdf) found here $31-$52] | ||
| Saffire | 101 (16) | 254 |
| 750 ml of Conundrum will run $72, worse than any other restaurant. Several other wines also have highest prices in Nashville. [list $28-$100] | ||
| Cabana | 75 (35) | 255 |
| [list $20-$42] | ||
| Buca di Beppo | 46 (24) | 256 |
| [list $24-$39] | ||
| Sperry's Belle Meade | 144 (32) | 258 |
| Highest prices on Opus One, Roederer Brut, Moet White Star, etc. [list (pdf) found here $24-$280] | ||
| Sperry's Cool Springs | 250 (54) | 258 |
| The same Nashville-leading markups as its sister location, though with a few extra markups. Cavit Pinot Grigio is $30, highest in Nashville. Strangely, the other Sperry's location has it at $22. [list (pdf) found here $32-$310] | ||
| Zola | 108 (32) | 260 |
| No bargains to be found. [list $24-$120] | ||
| Park Café | 62 (24) | 260 |
| Veuve Clicquot Posardin NV for $140? That's more than a case of Brut Rose (which is a better wine). [list $31-$115] | ||
| Midtown Café | 130 (50) | 261 |
| Very consistent (high) markups, top to bottom. [list (pdf) found here $26-$199] | ||
| Eastland | 50 (23) | 264 |
| [list $29-$90] | ||
| Radius10 | 67 (25) | 273 |
| Cheapest bubbly, an $8-$9 Barefoot for $38??? [list (pdf) found here $35-$130] | ||
| Anatolia | 16 (16) | 278 |
| Low-price wine lists have a disadvantage since the markups are usually higher, but Yellow Tail for $25? [list (pdf) found here $23-$37] | ||
| Sunset Grill | 241 (68) | 279 |
| Seasonal 50% off wine sales suggest regular prices are not too great. Several wines over four times retail. [list (pdf) found here $25-$400] | ||
| Merchants | 133 (48) | 279 |
| [list $25-$215] | ||
| Sambucca | 95 (23) | 283 |
| Come on! You can't offer a bottle of Lafite Rothschild ($400) without listing a vintage! [list (pdf) found here $28-$150] | ||
| Jimmy Kelly's | 61 (25) | 291 |
| Several wines have highest prices in Nashville. [list] | ||
| Acorn | 69 (46) | 316 |
| If you search long enough, you may find a wine price that is merely insulting. $70+ reds have some of the highest markups on the menu. [list $26-$120] | ||
Am I missing your favorite restaurant? Post it in the comments, preferably with a link. Disagree strongly? Dissent meekly? Have a thought or experience to share? Let me know that, too.
METHODOLOGY (very rough sketch)
From each wine list, between 10 and 36 bottles were randomly selected, depending on size of list, with stratification: (among three least expensive, among three most expensive, but under $500, and among three closest to $60) X (a white, red, and sparkling). Prices were compared to median retail prices among retailers indexed by winezap.com and wine-searcher.com. Additionally, several common wines, each listed on at least one-third of the wine lists, were recorded. If too few selected wines have substantial retail representation (and thus higher confidence in the median), additional wines were randomly drawn. The composite score weighs whites, reds, and sparkling wines equally (33% each), weighs individual wines with greater median confidence (lower standard deviation) more, and places additional weight on the basket of common wines.
First -- changes in the weighing formula do not have a huge impact on scores, with a few exceptions. However, a different random selection of wine from a large list, if markups are highly variable, can make a significant difference. Greater selection and bootstrapping could solve this, in part. Instead, I offer a caveat (don't take this too seriously) and suggest that one not make much of differences in scores when scores are close. Average standard deviation of the ratio on a wine list is 60.
I wonder if the higher markups are associated with higher corkage fees?
UPDATED: More restaurants added (25 September 2007)
UPDATE 2:Today, this table was reprinted in the Nashville City Paper (pdf). Thanks to Hoyt Hill of Village Wines, I am probably no longer welcome at half of Nashville's restaurants. On the other hand, if Margot would like to invite me for dinner, I accept. (2 October 2007)
UPDATED: Corrected Gaylord properties (4 October 2007)
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7 comments:
Great analysis - Thanks for doing this.
You actually used the wine lists for the two restaurants at the Gaylord Palms in Orlando - Old Hickory Steakhouse has a sister location at Opryland (wine list can be found here) but there is actually no Sunset Sam's in Nashville.
Janet, thank you for pointing out the error. I fixed it, and fortunately (for me) the two Old Hickory locations have nearly identical scores.
Hi, I'm Scott Sears, one of the owners of Flyte. I also manage the wine program. We're delighted to see that we fared well in this comparison study. I would like to clarify that Flyte does not base its pricing on retail in any way. We have a standard markup which is applied to our wholesale bottle cost, regardless of the wine. It is important to consider that a restaurant does not pay the same price for a wine that a retail shop does, and there is no consistent relationship between what we pay and what a shop pays. In fact, the wholesale cost of any bottle varies between every restaurant and every wine shop. Therefore, what a customer may perceive as a heavy restaurant markup may actually be a fair markup...on an unfair wholesale cost. (It is, of course, the responsibility of the restaurant to make sure they are not overpaying for their wine.)
Any perceived variance of our list:retail price ratio is a result of inconsistent pricing by the distributor, or volume discount by the retailer. When we find that we have been overcharged for a wine by the distributor we will either re-negotiate the cost or drop the wine from our list. I will be looking closely at what we're paying for our "upper-end sparklers", since your comparison has clued me in to the fact that Flyte is probably being overcharged for them.
Scott,
Thank you for the comment. Several restaurant owners have noted that there is a large difference in prices paid by the restaurants, so that these numbers are not indicative of the markups used. My use of retail prices is due to the consumer focus of this post.
It should be noted however that the chains and multi-restaurant owners are able to negotiate better prices with wholesalers. Thus, small, independent restaurants at the top of the list should be especially lauded, while the restaurants owned by those who own multiple eateries toward the bottom of the list are using even larger markups over their costs than the order indicates.
I am also the wine manager of one of the establishments listed above, though somewhat lower than Flyte.
While I agree with your relative ranking, the story is not complete without a discussion of the games wholesalers play. One restaurant can pay as much as twice what another pays. I see by your other posts that you are no fan of the alcohol distribution system in Tennessee, and that is certainly related to these prices, too.
Scott -
Since you use a standard (presumably, percentage) markup on each wine, that can explain why your high-end wines are relatively more expensive. Since most restaurants have alower markup for higher priced wines, a constant markup regardless of the price will make the high end wines more expensive than the competition.
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