For the restaurants, their rent is pushing like €250-300/m^2 (or much higher in some locations, much lower if you drive more)
I was also a bit confused about why beer was cheaper than water at some restaurants. That one threw me for a loop.
However some places like Ibiza are super expensive. 15 euro for a beer or 22 for a mix.
And yes bottled water is often more expensive in the supermarket than wine or beer too. In a restaurant you can often get tap water for free.
Take into account that wages here are much lower than the US though (probably less than half) and lower than nothern europe too.
For the restaurants, their rent is pushing like €250-300/m^2 (or much higher in some locations, much lower if you drive more)