Restaurant vs. Retail Wine Sales - Who's to "Blame?"

Restaurants vs. retailers. Sommeliers vs., er, wine store salesmen (oh heck, let’s call them “retail wine specialists”). Who has done more for America’s growing interest in wine? Who’s to blame for the majority of Americans’ continuing lack of interest?

What do you say? Here's my two cents, starting with the difference between restaurant and retail wine experiences:

In restaurants the act of ordering wine and having it opened for you is almost like a ballet. There is grace and gravity of moment, and you feel pampered, almost embarrassed, by the pomp and circumstances. In the retail store, you pick up your bottle and bring it to the cash register. A $10 bottle or a $100 bottle, it’s all the same – no more special than shopping at Walmart or Gap. Take your bag, walk to the car.

Ah, but as a longtime restaurateur, it’s not that I disrespect my brethren in the retail wine business. I’ve definitely taken advantage of the services offered in retail stores that specialize in wine (as opposed to just picking up whatever’s on sale in the nearest supermarket or discount warehouse). Go into a specialty wine store and tell them that you’re thinking of smoked salmon, crème fraiche and caviar, and ask what is the best Champagne for $35 that you can use to ply your sweetheart tonight, and the best possible bottle is placed in your hands in a matter of seconds. They live for this.

Specialized retailers also work hard at what they do; not only wheeling and dealing for the best buys, but tasting and reading all they can between those long, lonely hours straightening out the stacks. My only real criticism – although we’re seeing less and less of this these days – is that much of the expertise American retailers profess to have comes directly from the major critics: Robert Parker’s The Wine Advocate is a major influence, and so are Stephen Tanzer’s International Wine Cellar, Wine & Spirits, and of course, the (in?)famous Wine Spectator.

Yet you cannot really blame retailers for relying on these relatively few, chosen publications for determining which are the best wines to sell because

1. They say that it is the consumers, not the retailers, who give credence to the major writers.

2. It’s good to count on writers because these guys make their living studying, traveling and rating wines; whereas the po’ retailer has his hands full stacking boxes, stocking shelves and manning the cash register day-in and day-out.

The danger, as the retailers themselves would tell you, is that no one should really rely on the opinions of a few writers to form their own opinions. There are more than a few big-time collectors who have bought heavily in certain wines based upon published scores and recommendations, only to turn around and discover, years later, that the wines they spent thousands of dollars on are not really to their liking!

But ask your average, friendly neighborhood retailer what he or she thinks about the way wine is sold in restaurants, that’s when you may see the fangs come out. I don’t even like to walk into certain stores anymore, for fear that someone might recognize me as a former sommelier. “Most sommeliers are idiots,” I remember one store manager telling me. “They don’t know their stuff, and they’re no more than window dressing – excuses for restaurants to rip people off with their outrageous markups.”

And here’s another harangue, which I call the “hand-over-fist” story, gleefully repeated by retailers in various ways: “I know a restaurant in such-and-such place that barely marks up their wine – selling it practically retail! – and they’re making money hand-over-fist… why most restaurants sell wine for rip-off prices is beyond me… no wonder the restaurant business has gone to hell!”

So what is our alibi – why are restaurant wine prices typically so much higher than retail?

First of all, no excuses. In retail stores wines are marked up somewhere between 25% and 35% over wholesale cost, whereas in the average restaurant wines are marked up three times the wholesale cost. So a wine that wholesales for $10 would typically retail for around $15, whereas the same wine would typically sell for $30 in a restaurant. Is this fair?

Look at it this way: the half a chicken you buy in the store might cost you $3, but if you go a restaurant and order the same thing it will usually cost $10 to $15 – as much as four times more. Now you can argue that chicken has to be cooked in a restaurant, thus justifying the price, but wines are not. But look around your average 100 seat fine dining restaurant, and what you see is a maitre d’ or proprietor and two beautiful hostesses at the door, six waiters backed up by three assistants, a bartender and his bar-back, four or five cooks, one pastry chef, a dishwasher, two valets, and an expensively schooled, temperamental executive chef ready to walk any minute if his or her salary is not soon raised to $80K.

Stroll into your average retail wine store and what do you see? At the most, one cashier, one manager, a couple of sales people, and a stocker or two. Buy a wine from a retail store, and you’re certainly not going to get an army of servers and cooks, the use of a designer chair, a clothed table, crisply folded napkins, fresh flowers, hand polished silverware, glasses, and dishwashers to clean up after to you. With the cost of all this, it’s a wonder that the finest restaurants -- the ones with the bone china, crystal stems, celebrity chefs and sommeliers – don’t mark their wines up as much as ten times.

It’s also been theorized from time to time that the reason why so few Americans drink wine (less than 15%, last I checked) on a regular basis is because restaurants discourage this with their high markups and snooty attitudes. I’m sorry, but I’ve walked into fancy wine stores before and felt the attitudes of retail “wine specialists” coming up my yin-yang. And I fail to see the logic of blaming consumer disinterest on restaurant markups since most Americans purchase their wines in supermarkets and retail stores, not in restaurants. If the majority of Americans fails to see the joy in wine, surely supermarkets and retail stores share even more of the blame than restaurants.

But the fact is, most specialty wine stores as well as many supermarkets do a magnificent job of merchandising, and encouraging the consumption of, wine. There’s room for improvement all around, in both restaurants and stores. Personally, I think specialty wine merchants in particular could be friendlier, a little more anxious to help, and a little less geeky about it. As a customer, I’ve been just as intimidated in retail stores as I have in high-end restaurants with sommeliers.

Restaurants? Oh, I wish markups were kinder, servers more knowledgeable, and the wine selections more varied, imaginative, and food focused. I also wish professional sommeliers (God bless their idiot genes) were better appreciated for their knowledge, and given a freer rein to do what they do well and love the most, which is discovering and sharing new, exciting wines. Won’t you please give the next hard working sommelier you see a nice, big hug?

As for the mafia of the wine world, otherwise known as wine journalists: I wish they’d take food compatibility more into account when they rate their wines. Most wines are not meant to be something judged as a thing in itself. Consumers usually enjoy their wines holding a glass, knife and fork, not a pen and scorecard!

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Tags: markups, pricing, restaurant, restaurants, retail, sommeliers, stores, supermarkets, wine

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