Joel Goldberg

Although local restaurant wine markups vary widely, you might figure that wine prices in the cutthroat-competitive supermarket world would be more consistent, one to the next.

You’d figure wrong.

One fine example: Italy’s ubiquitous Santa Margherita Pinot Grigio. Fuhgedabout its modest crowd-sourced ratings; the wine’s a staple on most grocery store shelves, including seven of the eight Ann Arbor supermarkets I visited in late October.

If you’re a west-sider who shops at Plum Market, you’ll pay $17 to take home the current 2009 vintage.

Wanna spend more? No problem. On the south side, Meijer sells the same bottle for $19. Joe’s will Trade one in exchange for $21. And if buying the wine at Whole Foods makes you no healthier, its $24 price tag is likely to perk up the chain’s bottom line.

But if you really have money to burn, head east toward Hiller’s for the daily double: you’ll settle for the prior year’s vintage and they’ll soak you for $26 – a whopping $9 (53%) more than Plum’s price.

This may be an outlying example, but it’s far from atypical. The survey found prices on individual bottles can vary as much as 80% among the eight local markets, and your total tab for the identical assortment of wines will be 30% higher or lower, depending on where you shop.

Who buys wine at the supermarket? Most of us, according to the sales data. Supermarkets and their close kin – large specialty grocers like Plum and Trader Joe’s – sell one of every two bottles of the $9 billion worth of wine that America drinks annually. Many of us automatically reach for a bottle or three while we’re out foraging for vittles.

Supermarket wine sales (and “off-sales” in general) rose during the economic downturn, while restaurant sales plummeted.

Some highfalutin’ wine lovers eschew the grocery store as a refuge for overpriced generic and jug wines. To be sure, some stores still evoke the dismal supermarket wine departments of decades past. The single truncated aisle at the Carpenter Road Kroger springs to mind as the area’s worst example, with its repetitious, limited facings of labels like Barefoot and Gato Negro.

But at most places, that perception is as out-of-date as the Blue Nun Liebfraumilch that once graced the shelves. Some latter-day markets, like Whole Foods, give many wine specialists a run for the money – especially its best-in-class selection of Michigan wines.

Others consider themselves to be “a wine shop inside of a supermarket,” as Plum Market’s beverage manager Rod Johnson says; proving the point with his glassed-in temperature-controlled wine cellar featuring numerous price tags with three digits to the left of the decimal point.

The best consumer advice on avoiding supermarket schlock came – as was often the case – from recently departed Wall Street Journal wine columnists Dorothy Gaiter and John Brecher. Specifically, their Vintage 2002, but still applicable piece, 10 Ways to Find a Supermarket’s Best Wines.

Among their gems to locate the best wines at the best prices: “You will be punished” at the cash register for buying big-name, familiar labels; instead, look for less-familiar bottles. (Their example of an overhyped, overpriced bottle: Santa Margherita Pinot Grigio. See why I liked those guys?)

And steer away from the best-known California brands. Better values can be found elsewhere.

With their advice in mind, during the last days of October I compiled an unscientific list of 34 wines often found in supermarkets, avoiding the temptation to let usual-suspect California top-sellers totally dominate.

Instead, I reached further afield to include two well-distributed Michigan wines (Chateau Grand Traverse Late Harvest Riesling and M. Lawrence “Sex” bubbly, from Larry Mawby) along with several from Europe and the southern hemisphere.

Obscure, geek-type wines didn’t make the cut, even though places like Arbor Farms and Plum stock some of them – after all, the only way to effectively compare prices is with widely available brands. Fortunately, supermarkets consistently stock many of the same labels, making direct price comparisons easier than last year’s survey of restaurant wines.

List in hand, I checked eight local supermarkets to find out what was on the shelf and how much it cost, then culled the list to 21 wines available at a majority of the eight stores. Where wines were on sale – and there were many, especially at the larger chains – I used the sale price that any customer would pay. Don’t forget your Kroger card, or pay full price.

(Regular readers of The Chronicle’s meeting reportage, and other obsessives, may want to view or download the full spreadsheet, which includes all 21 wines along with their availability, pricing at each store, and average prices.)

So who’s Treetown’s Bull Moose el-cheapo?

The stores fell into three categories, based on their average prices compared to other stores that stock the same wines:

Wallet-Friendly: Prices below 90% of the all-store average

• Plum Market (83%)
• Meijer (87%)

In-Between: Prices within 10% of the all-store average

• Trader Joe’s (93%)
• Busch’s (98%)
• Arbor Farms (104%)
• Whole Foods (108%)

High Markup: Prices above 110% of the all-store average

• Kroger (112%)
• Hiller’s (114%)

What does that mean in practical terms? To find out, let’s go shopping! Fill your cart with one bottle of each wine in the survey – 21 in total – and head for the cash register. Based on their current availability, you can do that at three stores, one in each price range.

At Plum Market’s checkout, your instant mini-cellar will cost $199, plus tax. Get it at Busch’s – Ann Arbor’s closest-to-average priced store – and the same collection will set you back $40 more, or $239. But if you buy the same assortment at Hiller’s, you’ll shell out $269 for the privilege – $30 more than Busch’s and $70 more than Plum.

Or flip things around: let’s budget $100 to buy wine for a holiday party. At each store’s average price, you’ll return from Meijer with ten bottles, or from Busch’s with nine. At Kroger you’ll have to go a couple of bucks over-budget to come home with eight.

Other assorted observations, in no particular order:

• Selection varies widely from store to store – and is completely independent of prices. As noted, just three stores stocked all 21 wines in the survey: the least expensive store, the most expensive store, and one smack in the middle.
• You’ll find just two of the 21 wines at every store in town: 2009 Jadot Beaujolais-Villages (at prices from $11 to $14.50) and 2008 Yellowtail Shiraz ($5.44 to $10). Seven other wines showed up at seven of the eight stores.
• In general, locally-owned stores and small chains offer a better selection of small, offbeat wines, especially from Europe. That’s probably because local folks run their wine departments, instead of central-office buyers. Of particular note in this vein: Arbor Farms and Plum.
• One exception: Whole Foods gives their local staff authority to select a lot of the wines that go on the shelf. It shows: they offer the city’s largest, most prominently-displayed selection of Michigan wines.
• Hiller’s may be the most expensive store in town, but its selection excels in the $6-to-$20 mass-market price range. They stocked a surprising 31 of 34 bottles from the original survey, and all 21 in the culled version.
• If you want to go upscale, Plum Market becomes the go-to-supermarket, with its glassed-in cellar and many main-floor selections in the $25-$50 range. Second place: Whole Foods, with a surprisingly good selection of top-shelf wines at similar prices.
• Meijer tries to fool ya, thanks to its visually imposing wooden display bins that hold some interesting bottles, mostly Californians in the $10 to $25 range. But once past those, the selection heads downhill rapidly, even if the prices are good.
• Most disappointing selections: Kroger and Trader Joe’s, each with just 10 of the 21 wines, but for different reasons. Kroger – at least the Carpenter location – offers a small department with a limited selection. Trader Joe’s sells many more wines, but most are house brands (think Three Buck Chuck) and other exclusive-to-them labels.
• The single greatest pricing disparity: Kroger was selling that 2008 Yellowtail Shiraz for $10 a bottle, while at Plum Market you could buy the same wine at two bottles for $10.88. That makes Kroger 84% more expensive than Plum.
• While cruising the aisles, I also checked vintages, expecting to find many past-their prime bottles. But except for Hiller’s – whose stock included a half-dozen one or two year-older vintages – nearly every bottle in every store was a current vintage.

The inescapable conclusion: supermarkets are clearly moving their wines quickly. Better go out and enjoy one before they run out.

About the author: Joel Goldberg, an Ann Arbor area resident, edits the MichWine website and tweets @MichWine. His Arbor Vinous column for The Chronicle is published on the first Saturday of the month.

Joel Goldberg

Feel like celebrating a special occasion with dinner out and a bottle of Veuve Clicquot Champagne?

If you decide to clink your flutes at Gratzi, get ready to pay $105 for the privilege. But walk around the corner to West End Grill and you can raise a toast with the identical bubbly – for just $70.

Maybe you prefer a rich California red, like Duckhorn’s 2006 Napa Valley Merlot. At Mediterrano, a bottle will add $77 to your dinner tab. But you’ll save a sawbuck if you pair it with Pacific Rim’s Asian cuisine, where it’s only $55.

These oddities popped up from a dig into Ann Arbor restaurants – specifically, which ones offer customers the best value for their wine dollar. After riffing through a stack of wine lists, here’s the bottom line: some places in town soak you for 50% higher markups than others.

Restaurants commonly sell wines for two to three times their retail price. If you’re watching your budget, such steep markups can encourage you to eat at home more frequently, or deter you from ordering wine when you do eat out.

Local wine historian Dan Longone put it bluntly. “My god, they’re charging $30 and it’s a $10 retail bottle… We generally won’t order it.”

Many consumers apparently agree. While wine sales remain strong through the recession, overall numbers hide some underlying trends: retail sales have surged while those in restaurants dipped. That fits the pattern that 60% of restaurants nationwide currently report decreased sales.

California wine writer Dan Berger, who judged at last month’s Michigan Wine Competition, suggested this spring that high wine markups, which can double the cost of a simple restaurant meal, are a prime culprit behind lagging restaurant sales.

“That has left many restaurants with a lot of empty chairs on midweek nights; some are light on weekend nights, too,” Berger wrote.

Berger also points out that restaurants don’t pay retail for their wine, but instead buy at the same wholesale prices that stores do – about 1/3 under retail. That translates into marked-up prices that can reach an astonishing four times what the restaurants paid for the wines.

But signs are emerging that this may be changing, at least elsewhere. Just a few days ago, Galveston, Texas, wine columnist Laura Elder wrote that restaurants in her area were “uncorking aggressively lower prices on their most expensive wines to get consumers pouring through the doors.”

Standard industry apologia points to the costs that restaurants incur for glasses, storage, and the service to open and pour the wine. But those costs can’t justify this level of pricing, which exceed the markups on the far more labor-intensive food portions of a meal.

Nor can the majority of restaurants (save a few, like The Earle) explain high markups by pointing at their long-term investments to buy and cellar wines. Today, most restaurants offer primarily current releases that they buy as needed from area wholesalers.

So how does Ann Arbor’s restaurant pricing stack up? To find out, during August, I wheedled or downloaded wine lists from nine local restaurants: Café Zola, Grange, Gratzi, Logan, Mediterrano, Pacific Rim, Paesano’s, Real Seafood, and West End Grill.

While some of the restaurants clearly offer more and better choices than others, we’ll save that discussion for another column. All but the pickiest wine drinkers should be able to order an enjoyable bottle at any of them.

But that’s not the point of the exercise. Where will you find the best values and where will you overpay?

To find out, I price-checked a half-dozen bottles from each of the lists against their current retail prices on the shelves at Plum Market, divvying up the selections as much as feasible among white, red and sparkling; foreign and domestic.

Then came the number-crunching – calculating the markups on the retail price for each wine and each restaurant.

(I also calculated each restaurant’s markups based on their estimated wholesale cost, assuming a retail markup at Plum of 30%. Since this is an estimate, I avoided using it for much analysis.)

Variations on individual wine markups were striking. They varied from as little as 6% (that Duckhorn Merlot) or as much as 400% (Cristalino Rosé Cava at Café Zola) above retail prices.

Differences between restaurants were equally striking, if less extreme, with markups ranging from 84% over retail at the lowest (Pacific Rim) to 184% above retail at the highest (Real Seafood).

At the lower markup restaurants, you frequently find wines for less than double their retail price, others at just slightly more. At the other extreme, markups on individual wines of three times retail are common.

Overall, the restaurants broke down cleanly into three distinct groups.

WALLET-FRIENDLY (Restaurant prices less than double retail price):

• Pacific Rim (184%)
• West End Grill (187%)

IN-BETWEEN (Restaurant prices 200% to 220% of retail price):

• Mediterrano (214%)
• Grange (218%)
• Logan (218%)

HIGH MARKUP (Restaurant prices over 250% of retail price):

• Paesano’s (259%)
• Café Zola (261%)
• Gratzi (273%)
• Real Seafood Company (284%)

(If you’re curious, here’s a list of the wines used in the survey and the spreadsheet with the numbers.)

In practical terms, how does this translate when you eat out?

On average, a bottle that retails for $20 will cost you $37 at Pacific Rim and $57 at Real Seafood. Your mileage will vary, of course, depending on the individual bottle you select.

Or flip that around. Let’s say you want to spend $35 for a bottle of wine with dinner. At Gratzi, you’ll typically be buying a bottle that retails around $13. West End Grill is more likely to offer you something you’d see in a store for $19.

Of course, with a few exceptions like Veuve Clicquot, listed at five of the nine restaurants, you won’t find many of the same wines at multiple places. So if you have a strong hankering to pair Italian food with a good selection of less-common Italian wines, you’ll probably still want to head to Gratzi or Paesano’s. Enjoy your wine and don’t worry about the extra dollars.

In no particular order, here’s a few more observations gleaned from the wine lists and price data:

• It’s a pleasure to report that Sex is widely available throughout Ann Arbor, at prices ranging from $27 to $32. That would be Leelanau-based Larry Mawby’s slightly sweet bubbly, produced under his M. Lawrence label.
• Many restaurants traditionally took outsize markups on Champagne and other sparkling wines, on the theory that people sought them out to celebrate special occasions and would pay a little extra for the privilege. Some Ann Arbor restaurants still subscribe to this theory, so caveat emptor if you hanker for bubbly.
• Some restaurants specialize in certain countries or types of wine to complement their cuisine or cater to the restaurateur’s proclivities:
  -
  • Gratzi’s and Paesano’s lists are unsurprisingly Italianate.
  • West End Grill tilts heavily toward the U.S.
  • Pacific Rim offers numerous smaller and offbeat producers that might appeal to wine geeks.
  • Logan offers the broadest list, with over 200 choices.
  • Despite its locavore-oriented concept, only eight wines on Grange’s list come from Michigan. Half of them are Mawby bubblies.
  • Real Seafood primarily stocks bottles under $50.
  • On the higher end, Café Zola’s Reserve list offers a sizable selection between $100 and $250.
• Some restaurants set a minimum price for anything that appears on the list, regardless of how little they pay for them, in order to cover overhead and profit. If you’re price-sensitive, it’s a good idea to know this before you walk in the door.
• Café Zola plays this strategy ruthlessly, with a $34 minimum. They charge $35 for a bottle of sparkling Cristalino Rosé from Spain that Plum sells for $7. At an astounding 500% of retail, that’s the single most egregious markup in the survey.
• That leads to a related maxim: The lowest-priced wines on a list often represent the poorest values. Many savvy buyers figure that better values live just a few dollars above the opening price points.
• Second related maxim: Just because you’re not paying a lot of money doesn’t mean a wine represents good value. Real Seafood offers one of the lower-priced lists in the sample, yet topped the chart for markups.
• Best deal in the survey: That 2006 Duckhorn Merlot for $55 at Pacific Rim, just $3 over Plum Market’s retail. “They must have gotten a special deal on it,” observed Plum’s wine manager, Rod Johnson.
• Is it coincidence? The survey’s two highest-markup restaurants, Gratzi and Real Seafood, are owned by the same company, Main Street Ventures.
• West End Grill has some of the better prices across the board, but it’s of concern that many whites on their current list come from previous vintages. Even with good storage, the overwhelming majority of white wines are best on release or shortly after, and don’t benefit from aging.

Now the main thing: Wine is meant to be enjoyed, not nitpicked to death. So once you’re done with the price comparisons, don’t forget to treat yourself to a good glass of wine!

About the author: Joel Goldberg, an Ann Arbor area resident, edits the MichWine website and tweets @MichWine. His Arbor Vinous column for The Chronicle is published on the first Saturday of the month.