It behooves you for the restaurateurs you enjoy patroning to have healthy financials and not be squeezed, otherwise they can’t continue as a business.
It behooves you for the restaurateurs you enjoy patroning to have healthy financials and not be squeezed, otherwise they can’t continue as a business.
When you talk about 'beverage margins' or 'food margins', you must be talking about 'gross margin', i.e. [selling price, less direct costs of good sold] / [selling price]
When you talk about 'restaurant margins' and mention 2-6%, you must be talking about net profit margin (i.e. profit as a percentage of revenue).
It seems like you're comparing gross margin on beverages, with net margin for a restaurant overall. Not apples to apples.
The markup on food (based on ingredients only) and wine is similar (3x). It costs virtually nothing to store wine or to prepare it for sale. But the process to take ingredients and make a meal takes a lot of labour and machines.
Oh brother. The high gross margins on beverages positively contribute to the net margins. The point is that most restaurants aren't crushing it, margins are thin, and a middle-man taking a cut doesn't help.
on
Yes, I agree with you. See my other comment:
Well, except the cost of the space. Oh, and the refrigeration. Oh, and employing a sommelier (if it's a higher end restaurant).
Other than that, virtually nothing.
What is the cost of space and refrigeration for that time? 15 cents? 25 cents?
It's virtually nothing compared with the labour and machine costs of storing and turning ingredients into a meal.
And I'm genuinely curious (DoorDash isn't in my city) what proportion of restaurants that use DoorDash also have one or more sommeliers on site.
Customers are opting to go where the food is cheaper, and the drinks are more expensive. That's why it is that way.
Restaurants would love to have higher margins on food.
The restaurants chose to diverge from the underlying pricing, knowing that there was a risk that people would catch on, or the underlying economics would change.
I'd note that some have given up on it because it stopped working. McDonnalds just charges $1 for any drink, because the customers came to understand it was overpriced, and learned to work around their pricing shenanigans.
Nobody is fooled by the prices of things, they see it. And a minority wouldn't change pricing schemes.
We look at the food list, then the drink list and that's that.
But this considers only the cost of ingredients. So you'd rather sell a bottle of wine for $15 (that cost $5) than sell a meal for $15 (whose ingredients cost $5).
On your final point, I suspect that delivery via Doordash or similar can take margin that a restaurant's own delivery service (via phoning in) would have made, and that Doordash has inserted itself as an intermediary (with a margin) where none was present before. The pie might be bigger but I'm not sure whether Doordash is capturing less than or more than 100% of the increase.