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Restaurateurs enjoy higher sales with lower ... 4 • November 21, 2005 Restaurateurs enjoy higher sales with lower markups on bottled wine Bvy Carolv Carolyn WalkuDp Wine-loving restaurateurs

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  • 4 • November 21, 2005

    Restaurateurs enjoy higher sales with lower markups on bottled wine Bv Carolvn WalkuDBy Carolyn Walkup

    Wine-loving restaurateurs willing to take chances are lowering tra- ditional markups on their bottled wines in attempts to sell more wine, and several are succeeding beyond expectations.

    Morels, an American Bistro, in Bingham Farms, Mich., has dou- bled wine sales and attracted a more youthful and lucrative clien- tele since Madeline Triffon, master sommelier and beverage director

    for the Matt Prentice Restaurant Group, revised its pricing policy last summer All wines now are 50 percent above wholesale, rather than the industry norm of double or triple that amount.

    "Most of the wines we've tast- ed that were sincerely exciting would often be too high for what the average consumer would spend," Triffon said. "We wanted to turn people on to these wines."

    Master sommelier Madeline Triffon of Morels in Bingham Farms, Mich., has tallied a doubling of wine sales since lowering maritups.

    Morels owner Matthew Pren- tice said the resulting profits are being compounded by a surpris- ingly high volume of cocktail and beer sales at the suburban Detroit restaurant, which also have dou- bled since the wine-markup strat- egy took effect. He attributes that phenomenon to the taste many younger customers have for those beverages before their meals.

    One of Prentice's goals was to attract a younger crowd to Morels, where "gray hair was scaring away young people," he said. The older guests continue to dine on the early side, while more young adults are coming in a bit later.

    Michigan's new "doggy bag" law, which allows restaurant cus- tomers to take home opened wine bottles that have been resealed, also has boosted wine sales, Triffon said. She observes many couples now buying two bottles instead of one with their dinner and taking unconsumed wine home.

    Morels started the new policy after being open for 16 years, but several other restaurants have exploited low markups since their inceptions within the past few years. Chef-restaurateur Charlie Palmer's 3-year-old Kitchen 22 in New York's Flatiron district and Kitchen 82 on Manhattan's Upper West Side price bottled wine at either $25 or $35. "The idea is to be casual neigh- borhood restaurants with really

    (See RESTAURATEURS, page 82)


    Smith & Wollensky last year opened a unit in a registered national landmark castle that once housed Massachusetts' militia.

    Landmark buildings lure chain investors By Erica Duecy

    Expensive real estate, lack of park- ing and architectural-preservation rules have long challenged upscale operators that sought to open restaurants in heavily developed cities such as Boston, New York and Philadelphia.

    Now some restaurant groups, such as Ruth's Chris Steak House, Smith & Wollensky and McCor- mick & Schmick's, are re-evaluat- ing their real estate options and opening in historical landmark properties, often incurring mil- lions in additional build-out costs along the way

    At the same time, brokers and landlords of landmark properties say they increasingly are seeking national restaurant brands as

    tenants because the chains have ample capital to fund building renovations.

    In Boston, Ruth's Chris opened earlier this month at Old City Hall, an 1865 national landmark building, at an estimated cost of more than $3 million.

    Also in Boston, Smith & Wol- lensky late last year opened in a vintage 1891 registered national landmark castle that once housed Massachusetts' militia. The res- taurant build-out ofthe four-story former Armory of the First Corps of Cadets ran more than $10 mil- lion — double what the chain had expected, according to Alan Stillman, chief executive and

    (See LANDMARK, page 83)

    Salt content looms as possible next big health issue for operators By Brooke Barrier

    While trans fats have been a grow- ing health concern for the U.S, restaurant industry in the past year, sodium is moving toward cen- ter stage as the next hot topic.

    Already, sodium content is under fire in the United Kingdom, and such chains as KFC and Burger King are looking into ways to reduce salt in food items sold there. And with high blood pres- sure in Americans — especially children — on the rise and the number of deaths attributed to the condition jumping 56.6 percent from 1992 to 2002, according to the American Heart Association, sodium consumption is moving onto the radars of more restaurant operators,

    "Currently, restaurants are more concerned with trans fat, total fat and calories, and sodium

    is coming below these issues," said Sheila Cohn, director of nutrition policy at the National Restaurant Association. But, she added, "I think the concern about sodium is coming. A lot of food manufacturers are already mak- ing changes in the sauces and soups they make."

    Salt has long been a friend of the food industry because of its wide use as a preservative and a seasoning. However, most experts agree that Americans consume far too much of it in both packaged and restaurant foods.

    Excessive salt consumption has been linked to such health risks as high blood pressure, or hypertension, according to the American Heart Association, based in Chicago.

    Currently, about 65 million

    One way operators can reduce saH is by offering more Items that are naturally low in sodium, such as McDonakl's Fruit and Walnut Salad.

    Americans have high blood pres- sure, and 30 percent of them do not know they have it, said Milton

    Stokes, R.D., spokesman for the American Dietetic Association. The so-called "silent killer" has been shown to increase risk of stroke, heart attack, kidney fail- ure and congestive heart failure. Although the cause of high blood pressure for about 95 percent of cases is unknown, it can be affect- ed by many lifestyle factors, including excessive salt consump- tion. Stokes said.

    Salt is undoubtedly a tricky topic, experts note, especially because some sodium is needed for good health.

    "Sodium isn't entirely a bad guy," Stokes explained. "We need sodium for maintaining fluid bal- ance and for muscle functions."

    According to the Salt Institute, based in Alexandria, Va., Americans consume 3,500 mil-

    ligrams of sodium a day on aver- age, with men consuming greater amounts than women. The National Academy of Sciences suggests that adults should eat at least 500 milligrams of sodium a day and, according to the American Heart Association, no more than 2,300 milligrams, or about 1 teaspoon.

    "It's been demonstrated that decreasing sodium is much better for lowering hypertension than taking medication with side effects," said Jan Dodds, a repre- sentative from the Society for Nutrition Education who was recently appointed to the advisory board of the American Council on Fitness and Nutrition. "So what- ever restaurants can do to foster that will be an advantage."

    (See NEXT, page 26)

  • 82 •November 21, 2005 NATION'S RESTAURANT NEWS

    Restaurateurs uncork higher sales by lowering wine markups (Continued from page 4) nice wines," said Monica Smith, general manager at Kitchen 22.

    Getting case discounts on wine purchases enables the Palmer restaurants to sell bottles at those prices and still make a profit. Their wholesale cost ranges from $7 to $11 per bottle. Smith said. Wines

    by the glass sell for either $7 or $9. That pricing has resulted in

    higher bottled wine sales to small- er parties, and sales of second bot- tles are common. Smith said. Wine represents about 23 percent of total sales at Kitchen 22 and Kitchen 82, she said.

    New York also recently enact-

    ed a law allowing restaurant guests to take home resealed bot- tles of wine, and her guests now do so often. Smith added.

    Mermaid Inn, a casual, 80- seat. New England-style seafood restaurant in New York's East Village, marks up all wines at $15 over cost, said co-owner Jimmy

    Bradley. The policy has worked very well for the two-and-a-half- year-old restaurant, which contin- uously changes its 35-bottle list.

    "It's a lower-market concept in a neighborhood that appreciates funky ideas," Bradley said. "It cre- ates interest and enthusiasm."

    Bottles are priced from about

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    $30 to $100, and many Mermaid Inn customers buy second bottles, he said. Many competitors sell the same bottles for at least twice the price, Bradley claimed.

    Other establishments offer reduced wine prices on a slower night of the week. One such restaurant is Nacional 27, a Latin-flavored operation in Chicago run by Lettuce Entertain You Enterprises. The restaurant's

    Operators also haveboosted trafficdramatically on slower nights by waiving corkage fees on diners' own prized bottles.

    weekly Wine Down Wednesdays promotion features five-course tasting menus paired with wines for $44. On other nights the same men

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