Is It Time To Start Raising Prices?
Restaurant beverage professionals looking for signs of life and growth have new info that should brighten their day.
Restaurant Sciences, a research firm that tracks food and beverage product sales throughout the foodservice industry in North America, recently reported that wine prices in American restaurants have been increasing steadily over in the last three months of 2012 and the first three months of 2013. According to the company, the prices are creeping up in all sectors, though Family Dining and White Tablecloth segments are taking the biggest increases, said Chuck Ellis, president of Restaurant Sciences LLC.
On average, the mid-priced Casual and Upscale-Casual segments have posted only modest increases at about two percent each. Family Dining increases however have been averaging about 8.36 percent, while White Tablecloth establishments posted a substantial 5.35 percent average price increase during the same period.
“Casual and Upscale-Casual restaurants took very little price increases these past 6 months despite overall sales softness in these tiers,” said Ellis.
The Restaurant Sciences survey examined more than 28 million wine purchases – via glass, bottle or carafe of wine, a number that represented $289 million in restaurant wine sales over the time period. The data reflects a same-store sub-sampling of more than 5,000 restaurants, but specifically focuses on stand-alone restaurants above the Fast-Casual level.
Restaurant beverage execs have been combing the trend charts, looking for signs that the price increases that are heading their way from suppliers can be managed and passed along, when necessary, to customers, and this wine pricing data reveals that they stopped waiting in many cases months ago.
The report from Restaurant Sciences, which provides syndicated data and insights on food and beverage consumption in restaurants, bars, nightclubs and other foodservice establishments, suggests that those operations and chains that have not yet taken price increases will do so sooner rather than later, and that impulse is just as likely to affect beer and spirit prices as well. Numerous spirit and beer brands have been taking price increases throughout the last year, leaving the end-seller to decide what to do with them. Wine producers have been talking for some time about the sopping up of the wine lake by inventive marketers and new wine trends, and the tightening up of wine supplies has pointed to price increases for some time. Now we have proof that the price tide is starting to flow as the supply tide ebbs. Beverage alcohol retailers, more than restaurant operators, have been seen as willing to pass the price increases along, but now there’s evidence that we’re seeing wine prices rise on-premise. No word from the report on wine sales trends, but it will be important to compare the two charts when that data starts arriving.