A bottle of Veuve Clicquot Champagne might set you back $40 at BevMo. But at a white-tablecloth restaurant, expect to pay more than double that amount.
It's no secret that restaurants boost their wine prices. But in an industry well known for its relatively low profit margins - typically 8 to 12 percent - some things have to pay the bills.
So what besides booze are the most marked-up items on the menu? Buyers for restaurants say that fancy bottle of water with a price tag of more than $3 costs the restaurant only between 40 and 90 cents. Soda from the fountain sells for 20 times the restaurant's cost, and eight times more when it's served in a can. Pasta, pizza, eggs and that little mixed green salad are all a license to make money.
But with rising costs, those margins are tightening.
"I would say that there are no big profit makers like there were in days of yore - rising transport costs affect every sector of the produce world, and while eggs are a more profitable vehicle than steak, they, along with butter, are by no means a great deal anymore," said Dennis Leary, owner of the San Francisco sandwich shops the Sentinel and Golden West, Canteen restaurant and House of Shields bar. "Coffee used to be a nice little markup, but I think prices have risen 300 percent or something."
Tea and booze
Restaurant owners can still rely on tea and booze to raise their numbers.
A cup of tea in a nice sit-down restaurant goes for $2.25 to $3.25, whereas the tea bag costs no more than 35 cents, said Frank Klein, a national restaurant consultant in Palo Alto.
The typical wine markup is two to three times the restaurant's cost, he said. Wine by the glass at a 300 to 400 percent markup is even more profitable than wine by the bottle. Beer costs are roughly 25 cents on the dollar.
"When it comes to spirits, for every dollar a restaurant sells, it doesn't want it to cost them more than 22 cents," Klein said, adding, "These are strict product markups that don't include the vast operating costs that restaurants incur."
But those prices are based solely on the wholesale cost of the item, without factoring in labor and overhead.
"You have to consider the price of insurance, the cost of a liquor license and the expense of broken glassware," said Clark Wolf, also a national restaurant consultant who works in Sonoma County and New York City. "Just to wash each glass costs $1."
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