Starting at age 18, in Portugal, I learned how to fill restaurant tables to rotate a 1,000 people a day. From there I was a headwaiter on the Royal Caribbean Cruise Lines and then was asked to be the captain’s waiter on Crystal Cruises – an elite cruise line. There, I learned the high-end service dining style. Then I owned my own restaurants in Portugal and moved to the front and the back of the kitchen.
Now, when I eat at a restaurant, I really appreciate excellent service and food. And I’ve got a good sense for when I’m being “sold” to sell certain items on the menu.
So I’m going to let you in on a few secrets about profit margins.
Know the margins
I’m sure you know that alcohol is marked up significantly, anywhere from 80 – 400%. The cheaper the wine, the higher the markup. Knowing this, I don’t buy wine that costs more because I’m getting a better “deal.” I typically like a medium priced wine when in doubt or bring my own Caymus in, pay the corkage fee and tip well.
But did you know that soda is marked up even more?! A $2.50 soda even with one free refill, only costs the owner about $0.20 MAX. That’s an 1,150% markup! That’s why the free refills are offered. The profit margin is huge! I think soda sucks to begin with. But this makes it easier for me to just order plain tap water, which I know my body will thank me for.
Other items that cost less to prepare but are marked up more than a regular entree are the pasta and pizza. The best values in entrees are seafood and steak.
Don’t even get me started on “The Special of the Day.” Some chefs use the specials to either:
- Promoting ingredients they want to get rid of, or
- They’re experimenting with a new dish.
For me personally, I don’t mind the latter. And when I know the chef I get excited. But if I don’t know the chef, I don’t know for sure which option I’m getting.
So next time you go to a restaurant, 3 tips to remember…
- Order a medium priced wine. Or bring your own high-end bottle, pay the corkage fee and tip 20% minimum.
- Forget the chemical-laced soda and order plain tap water. In my humble opinion, tap is great.
- Avoid the pasta, pizza and “The Special of the Day.” If you’re eating traditional protein, order seafood or steak.
Question: Which tip is your favorite? 1, 2 or 3? You can leave a comment by clicking here.