Los Angeles Bar: Sales Are Down, Price Changes Partly Due to Tariffs | Invesloan.com

This as-told-to essay is based on a conversation with Zach Negin, 46, owner of Tabula Rasa Bar in Los Angeles. The following has been edited for length and clarity.

I own a neighborhood bar in Los Angeles, where the bulk of what we sell is wine. There weren’t many wine bars in Los Angeles when we opened nine years ago.

When we first opened, we had to establish ourselves, get to know everybody, be good stewards of the neighborhood, and gain the trust of our customers.

Then COVID happened. We were shut down, and when we finally reopened fully a year and a half later, it felt like starting over again.

Now, it feels like I’m starting over yet again. Tariffs have had an effect on the industry. We like to have wines from a variety of places because it’s very location-dependent. That’s the story, the history, and the romance of it. When you have less access to those things because they’re more expensive, it limits our ability to have a variety of products.

Because I have little kids, I want to be able to work on the business and not be behind the bar as much. That’s changing again, which is unfortunate for me and for my family. It’s fine. It’s what I need to do. It’s my business.

Running a business feels harder than it’s been in the past — in a different way.

The last time there was a tariff war like this was the last time Trump was president

There was some wiggle room, though: Many wines of at least 14% alcohol by volume were not tariffed. At that time, a number of the distributors we work with — almost exclusively small businesses, and the winemakers they work with are oftentimes solo winemakers — and importers said, OK, well, we’re just going to kind of split this cost. The producer’s going to take a hit, the distributor’s going to take a hit, and then we’re going to have to raise prices a little bit.

This year, it’s been these very rapid tariffs, and nobody really knows if they’re going to stay. A number of distributors had wine that was already here and not subject to tariffs. The new stuff was, so we get emails saying, We’re going to have to raise our prices.

That means wines that we used to be able to buy at a certain price are now two to five dollars more a bottle, or up to 30% more. And that may put them in a different price range for us in terms of what we can turn around and sell them for.

There are fewer affordable options that fit within the niche of the types of wines that we like to buy: small production, low intervention, and good farming.

One wine we buy, for instance, increased by $1.50 a bottle, from $23 to $24.50. That means we have also had to raise the price we sell it for — from $81 to $86 per bottle. We’re not just rebuying the wines when they increase in price due to tariffs. We find less expensive options as well as lower our margins on many of the wines we serve.

Our wines come from all over the world, including right in Los Angeles and other parts of the US. We haven’t necessarily been buying more domestically because that was already more expensive due to labor and land costs. Also, a lot of labels, corks, and glass come from all different places. We’re not just talking about crushed grapes that have fermented.

The only thing coming down is sales

Our sales have dropped 26% since March, which is quite significant. I don’t attribute 100% of that to tariffs, but that’s having an effect. The overall economy and the cost of things are factors. This is why we’re making some business changes.

Prices everywhere are higher, so people are going out less. The entertainment industry in Los Angeles has been hit pretty hard. They’re working less frequently or not at all.

With lots of things being more expensive, we’re also trying to lower our prices at the same time to meet our consumers instead of just going up and up and up. This is very tough in Southern California because labor is going up, rent is going up, insurance is going up, cost of goods is going up.

To lower our prices, we need to find different products of similar quality because what we used to buy is now more expensive. So our prices have gone up as the tariffs have gone up. But in an effort not to just have everything continue that way, I have been focused on trying to find lower price point items that we can still feel good about serving, so that our overall price point can be lower. However, we’re making less money. So in that case, we’re taking the hit on that, not marking up the same.

We’re still keeping prices as low as possible, including always having a $9 glass of wine and $6 draft beer at happy hour.

We are focused on not laying anybody off

We’ve changed in and out times a little bit to shorten the hours of a shift. The bulk of our team’s wages in the bar come from gratuities and tips.

When people might call out or go on vacation, we just aren’t filling those shifts on that given night. We might just run a little lean, or I might come in for a couple of hours, or my manager will work more service.

It’s a new thing that we’ve been talking about for a little bit, and looking at how to make these adjustments without severely affecting anyone’s income. I think they’re all on board and understand why we’re doing it and that we’re trying to do this in a way that keeps their best interests in mind.

We’re just trying to stay ahead of it. We don’t want to get caught in a place where we are bleeding money and then don’t have money for payroll or to pay our vendors.

I feel pretty confident that we can make it through, but it might require some serious changes

It may require changes that I don’t want to make, which would be having to lay staff off, and I would be the person filling in. I’m aware that it could get to that place, but I don’t plan for it, and I don’t expect it.

What we’ve done now is the things that are within our control, which is to be able to focus on hospitality and service and wine education for our team so that we can continue to be the place that people want to come to because people are still going to go out and are still going to spend money, but why do they decide to come to our place tonight versus somewhere else? That’s always the question for me.

As a small-business owner, you don’t get to complain about tariffs or other things. You just have to deal with them. We don’t have the ability to change that. There are a few small groups that are helping lobby.

We just have to continue on. And if governments whose decisions affect our business say, OK, this is how much it’s going to cost now, then we just have to deal with it. There’s not much we can do. I don’t complain about that. I signed up for this, and I love it. I would love to have more small businesses thrive. That’s ultimately what I’d like to see.

How have tariffs affected you as a customer or business owner? Reach out to this reporter at [email protected].