When wine margin falls, the instinctive reaction is to raise prices. But that has limits: the market, competition and customer perception. Raising prices is the most visible solution, but also the riskiest.
You can review five operational areas without changing selling prices and examine pricing architecture separately. These are review proposals, not guaranteed improvements; changing multipliers or prices requires a different scenario.
Why margin falls without anyone raising prices
Before looking for solutions, it is worth understanding why margin quietly erodes:
- Purchase costs rise, but nobody reviews the multipliers.
- Low-margin wines gain a larger share of sales because they are recommended most often, or customers see them first.
- By-the-glass wastage grows without anyone recording it.
- The sales mix changes and the more profitable wines lose visibility.
Changes must be calculated using comparable revenue and costs. No cumulative decline has been quantified for this article, and percentages should not be added without defining the base and period.
Five operational levers and a separate price review
1. Renegotiate purchase prices
This is the most direct and most overlooked lever. Many restaurants have paid the same prices for the same wines for years without asking whether there is room for improvement.
What to do:
- Compare what you pay with what others pay for the same wine or equivalents.
- Ask the supplier to review prices using volume and loyalty data.
- Explore alternatives with a similar profile and a better cost.
- Consider consolidating suppliers and compare the resulting offers; buying more from fewer distributors does not guarantee better terms and can increase dependence.
What to measure: comparable purchase cost before and after, including terms, transport and discounts. No typical improvement percentage has been validated for this article.
2. Remove low-margin, slow-moving wines
A wine with low margin and slow turnover warrants a review of demand, stock and role. Removing it may simplify the list, but does not guarantee a better offer or replace an assessment of cellaring, seasonality or service.
How to identify them: cross gross margin with monthly turnover. Those in the bottom-left quadrant, low margin + low turnover, are direct candidates.
What happens when you remove them:
- Cash is released only if stock is actually sold or returned; delisting does not itself release capital.
- The service team has fewer options to learn and may recommend with greater confidence.
- Check with customers and the team whether the resulting selection is perceived as clearer and more coherent.
3. Give high-margin wines more prominence
If you have wines with good margins and low visibility, review their exposure alongside demand, price, style and availability; do not attribute the result to a single cause.
Specific actions:
- Move them to prominent positions on the list, such as the first lines of each section or next to the most visible wines.
- Include them in the service team's recommendation list.
- Highlight them as "sommelier's selection" or "favourite of the month".
- If the system supports configurable visibility rules, review their scope and changes with the person responsible; otherwise, consider manual ordering or placement without assuming an algorithm is available.
What to measure: revenue, costs, units and mix for those wines, comparing periods and context. Greater visibility does not guarantee more sales or a percentage improvement.
4. Optimise the glass/bottle mix
The profitability of glass and bottle sales depends on price, usable serving size, costs and wastage; by-the-glass sales cannot be assumed always to have a higher margin.
Key points:
- Two restaurants with 20% and 35% of revenue from by-the-glass sales may have the same or different margins: costs and mix are needed to compare them.
- A lower amount per glass does not demonstrate that customers will accept a higher multiplier; check price, serving size and demand.
- Moving, in a fictional scenario, from 20% to 30% of wine revenue from by-the-glass sales does not by itself determine the margin change. Define the denominator and calculate the effect using actual costs, serving sizes and sales.
How to do it: train the team to recommend a glass as a first step, offer by-the-glass pairings and suggest a premium glass as an upgrade.
5. Reduce wastage
Measure recorded wastage by cost and period; this article provides no demonstrated usual rate. An opened bottle that is not sold in full requires a review of preservation, usable yield and actual loss, rather than assuming the entire remainder has been lost.
Sources of wastage:
- Open bottles that do not sell during the service and deteriorate.
- Overpoured glasses: excessive generosity in service.
- Low-demand by-the-glass wines that are opened and not finished.
- Storage errors that damage the product.
How to control it:
- Define a measurement frequency appropriate to service; a weekly review can be a starting point, not a universal maximum.
- Reduce the number of by-the-glass wines open simultaneously.
- Use preservation systems for premium wines.
- Define and train the team in serving volume and its measurement; 125 ml or 150 ml can be planning examples, not a universal standard for all wines and markets.
6. Review pricing architecture and clarify its scope
Reviewing presentation and the wine mix can be done without changing selling prices. Changing multipliers does change prices: that decision falls outside any fixed-price scenario and requires its own analysis.
Principles:
- You can assess lower multipliers for some premium wines, according to cost, demand and positioning, without assuming customers will trade up. As an arithmetic example, €14 × 2.5 = €35 and €14 × 4 = €56. This does not demonstrate which will sell more or generate greater profit: units sold, costs and demand are missing.
- Entry-level wines can have higher multipliers, but only after reviewing demand and perceived value; do not assume a price elasticity or that the difference between €5 and €6 is irrelevant to customers.
- Create a clear "value step": make the difference between a €5 glass and a €7 glass visually justified through the description and position on the list.
Practical example: combined impact
Fictional review scenario, not observed Winerim results: a list of 80 wines takes a hypothetical starting margin of 62%. The table lists actions, not predictions of their effects:
| Lever | Specific action | Estimated impact |
|---|---|---|
| Renegotiate 10 leading wines | Call 3 alternative suppliers | Measure comparable cost and terms |
| Remove 8 underperforming wines | Review the low/low quadrant | Measure the effect using revenue and costs |
| Move 3 high-margin wines into visible positions | Change list order | Measure; do not attribute causality without comparison |
| Increase the glass/bottle ratio from 20% to 30% | Train the team in by-the-glass recommendations | Measure comparable cost and terms |
| Reduce wastage from 12% to 6% | Weekly monitoring + standard serving measure | Measure; do not attribute causality without comparison |
| Rebalance multipliers by band | Lower ×4 on premium, increase on entry level | Measure the effect using revenue and costs |
Combined impact: it cannot be calculated from this table, nor can the effects of overlapping actions be added together. There is no guaranteed improvement or demonstrated observed percentage.
When raising prices does make sense
There are situations where raising prices is legitimate and necessary:
- When purchase costs have risen significantly and the other levers do not offset this.
- When your pricing is objectively below the comparable market.
- When you introduce a new premium wine and its positioning justifies it.
But even in those cases, raising prices should be the last lever, not the first.
Frequently asked questions
Where should I start? With information. If you do not have actual margin data per wine, start there. Without data, any action is blind. Carry out an initial review and prioritise evidence-based actions; neither a duration nor an impact ranking is guaranteed.
How long does it take to notice an impact? No effect timeline has been validated for this article. Record a baseline, make changes that can be reviewed and compare equivalent periods; distinguish a margin change in percentage points from a percentage change.
Does this apply equally to a small restaurant and a group? The levers are the same. The difference is the scale of impact: the effect observed at one venue cannot automatically be multiplied by ten; each venue has its own demand, costs, mix and operations. Groups also have the advantage of internal benchmarking to compare what works at each unit.
Can I do this without software? You can start with an Excel spreadsheet. But continuity is the key: you can maintain manual or automated reviews if you assign responsible people, frequency and consistent criteria. A system that monitors continuously turns these levers into a process, not a project.
→ Margin calculator → Winerim Core: margin analytics → Winerim Supply: purchase renegotiation → How to calculate the price per glass correctly → Request a demo