Thursday, December 07, 2006

Raise the price, sell more wine

Cooking with Amy has an interesting post on wine markups in restaurants, including this story from Elizabeth Falkner of Citizen Cake:
Elizabeth Falkner mentioned that lower priced wines don't always sell. She recalled a terrific wine she priced at $5 per glass that no one would order, that is until she raised the price.
This fits with the conventional wisdom that smart diners order from the bottom or the upper half of the prices on the wine list, but never in between. The idea is that restaurateurs know diners don't want to appear cheap by ordering the cheapest wine or two, and go for the third- or fourth-cheapest, so the restaurant owners allegedly simply put an extra markup on some wines to get them into those positions.

It also reminds me of a story an old friend of mine told me. Her family ran a high-end grocery store in the Bay Area and claimed that managers at another high-end Bay local grocery chain said they when they wanted to clear a particular product out, they would just hike the price and put in on the endcap.

The Chronicle has been more aggressive in their coverage of wine markups than the local magazines, alt weeklies or even bloggers. I think there's room to take it even further, after all this is the kind of work bloggers could do at home in their pajamas with a calculator and some Google searches, accumulating a large database.



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