A model for wine list and wine inventory yield management

Fine dining restaurants with extensive wine lists often have high-value wine inventories and low inventory turnover ratios that reduce the owner's return on investment. The restaurant management literature does not provide fine dining restaurant managers with the tools that enable them to evaluate and make changes to wine list selections, pricing and inventory levels in order to improve the returns from the investment in wine inventory. This paper contributes to the literature by drawing concepts from yield management, retail science and menu engineering to develop a yield statistic and analytical model for managing wine list and wine inventory productivity. WINSPID (wine sales per inventory dollar) is the product of wine mark-up and inventory turnover ratio. Graphs of wine sales and inventory data, mark-up and inventory turnover ratio enable the restaurant manager to analyse, improve and monitor the wine list, wine inventory and wine supplier performance.

Research highlights▶ A yield statistic for wine list management (WINSPID) is developed from retail science and yield management concepts. ▶ WINSPID is incorporated into an analytical model employing graphs and principles drawn from menu engineering. ▶ The analytical model is used to illustrate how managers can evaluate complex trade-offs between wine list selections, pricing, inventory levels and supplier performance.