Comments on disequilibrium: Restaurant wine prices

Scott -Since you use a standard (presumably, perce...

2007-10-08T22:53:00.000-05:00

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.

I am also the wine manager of one of the establish...

2007-10-08T13:44:00.000-05:00

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,Thank you for the comment. Several restauran...

2007-10-08T07:46:00.000-05:00

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.

Hi, I'm Scott Sears, one of the owners of Flyte. ...

2007-10-07T23:57:00.000-05:00

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.

Janet, thank you for pointing out the error. I fix...

2007-10-04T11:31:00.000-05:00

Janet, thank you for pointing out the error. I fixed it, and fortunately (for me) the two Old Hickory locations have nearly identical scores.

You actually used the wine lists for the two resta...

2007-10-04T10:07:00.000-05:00

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.

Great analysis - Thanks for doing this.

2007-10-03T16:31:00.000-05:00

Great analysis - Thanks for doing this.