I read a report this weekend about tough times in the on-trade.
The head of the NZ Hospitality Association said that deep discounting in supermarkets and bottle shops was creating price problems for restaurants and bars – encouraging more people to stay at home and drink. The same thing has happened in the UK.
Admittedly supermarkets have huge bargaining power, giving consumers low prices but this is not the only reason for people staying at home.
While bars have high overheads to cover and good operators work their fingers to the bone, a glass of half decent wine in Auckland will leave you around $10-$15 poorer. That’s about the same as what you’d get charged in London but at least you get a larger serve in the UK. I had a glass of a Macon Chardonnay on Saturday night and it cost $13 – the bottle sells for $32 in a fine wine store half a mile away. The mark up in most retail stores is about 30% so let’s say they bought it wholesale for $24. If a bar gets five glasses from the bottle at $13 a glass, that’s $65 in the till. I don’t mind paying mark ups if it’s justified but I expect good service, clean loos…added value, I believe.
Such mark ups in the on trade have long been the norm but it is not an incentive to stay and have a second or third glass because quite frankly you feel fleeced. Are bar owners so driven by their gross profit that they forget that money in the till is also important – even if this is at the expense of margin?
While bar and restaurant owners are hoping for fine weather to boost business, a look at offering value for money might also help.
