Alcohol Isn’t Worth the Trouble for Some Chain Restaurants
I’ve often wondered how long it would be before Starbucks cornered the bar scene market in additon to the coffeehouse one they already dominate. They also make liqours, so why not wine? New York Times reporter Stephanie Clifford clears that up for me.
Some restaurant chains are turning to the bottle during the rough economy, but the liquoring up has produced mostly headaches, not happiness.
Outlets that specialize in quick and cheap daytime meals — including Starbucks, Sonic and Guy & Gallard, the New York chain — have been experimenting with adding alcohol to their menus. Pret a Manger, the British sandwich maker, is considering adding wine in its new Paris stores, and Burger King last year began selling beer at its more expensive Whopper Bars in the United States.
With alcohol one of the highest-margin items on a menu, selling beer and wine can lead to increased revenue.
“Alcoholic beverages are highly, highly profitable,” said Bonnie Riggs, a restaurant industry analyst at the market research firm the NPD Group. “It’s been such a challenging time for the restaurant industry, I think they’re trying to pull out all the stops and try different ways of getting consumers to the restaurant.”
But some of the chains say that so far, the menu changes have been a lot of trouble with little reward. Customers apparently just don’t think a value meal pairs well with a cabernet, and the logistics involved with selling alcohol can be daunting and expensive. The problems include obtaining permits, training a staff that has high turnover, slowing down service when IDs have to be checked, and finding a dedicated area for alcohol service.
“Fast-food restaurants aren’t set up to be bars,” said David Henkes, who advises restaurants on alcohol sales at the consulting firm Technomic. “Based upon the amount of sales that most restaurants would get from alcohol, it’s just not feasible for most restaurants to do it.”
With so many employees under the legal drinking age of 21, fast-food restaurants have a particularly hard time when it comes to alcohol service, said James M. Seff, a lawyer who advises wineries and breweries at Pillsbury Winthrop Shaw Pittman.
“If someone is 18 and a buddy comes in who’s 18, chances are better than otherwise that the minor will serve them,” he said. “The regulatory authorities will murder them if there is a pattern in practice of service to minors.”
Sonic, a drive-in chain a based in Oklahoma City, added beer and wine to the menu in its new Homestead, Fla., location in July. The addition was based on nearby restaurants’ menus, and it was meant to bring in customers at night, said Drew Ritger, senior vice president for business planning and purchasing at Sonic.
“When you stand on our patio and look around, you will see almost every concept that is around us has some type of patio feature, and they serve beer and wine,” Mr. Ritger said. “It gave us an opportunity to really drive our evening traffic.”
But the alcohol has come at a cost. In addition to the normal hurdles, like obtaining a license to sell beer and wine and training employees to serve the drinks, the restaurant had to hire security guards to keep away underage drinkers, and it expects insurance rates to increase, he said.
And for what return? “Candidly, they’re not utilizing those products very much at this point,” he said. “It doesn’t look like it’s a big deal to consumers — it’s clear they come to us to have an extra-long cheese coney or an all-beef hot dog.”
While Sonic is considering offering alcohol at a beach location opening soon in Fort Lauderdale, Mr. Ritger said he did not expect Sonic to make alcohol available at restaurants nationwide.
“Most quick-service restaurants in the country do not offer beer, wine or other alcoholic beverages,” he said. “Most people are probably used to that.”
The bumpy rollouts have other chains limiting their ambitions, or at least proceeding cautiously.
Pret a Manger, the London-based sandwich chain, sells alcohol in some of its airport locations and is considering selling wine in its new Paris stores. But, said Clive Schlee, the company’s chief executive, it is not an important part of the business, and he does not expect it to be.
Starbucks is testing wine and beer sales in five stores in the Pacific Northwest. Three-quarters of its store traffic in the United States occurs before 2 p.m. each day, said a spokesman, Corey duBrowa, and the alcohol is meant to attract a nighttime customer. While feedback has been positive, Mr. duBrowa said, Starbucks has not announced plans to offer alcohol beyond those five stores.
Burger King has gotten a firsthand lesson in how difficult selling alcohol can be. In 2009, it began opening Whopper Bars as a more upscale complement to its fast-food locations. The Whopper Bars serve items like a Bourbon Whopper and a New York Pizza Burger, and customers choose additional toppings like pepperoni, onion rings or guacamole.
It started selling beer at Whopper Bars in the United States in 2010, but although Burger King has 10 Whopper Bars worldwide, it serves beer at only six of them, in part because of licensing issues. Last summer, for instance, it opened a New York location near Times Square and promised that it would have beer within weeks, but the store has still not received approval for a liquor license and has given up on plans to serve beer for the time being, said Michelle Miguelez, a Burger King spokeswoman.
In a sign of just how hard it is to add anything alcohol-related to a menu, Burger King last year tested a nonalcoholic breakfast mimosa, made of orange juice and Sprite, in some cities. But watchdog groups objected, saying even a virgin mimosa was inappropriate at a family restaurant. The mimosa is no longer being served at any restaurants, Ms. Miguelez said.
A version of this article appeared in print on September 27, 2011, on page B1 of the New York edition with the headline: The Alcohol Experiment.