Specials and promotions can boost your revenue, but they can also eat into your profits. Picture this: you launch an exciting promotion, tables fill up fast, but somehow your monthly profit shrinks. Most restaurants focus only on extra sales while completely ignoring what those deals actually cost them.
Why promotions often cost money instead of making it
You've probably experienced it: you launch an enticing promotion, the place fills up, but at the end of the month there's less left than expected. How can that be?
⚠️ Watch out:
Many restaurants only calculate the discount, but forget that specials often contain more expensive ingredients or larger portions than regular dishes.
Most problems arise because you:
- Don't calculate the cost price for your special
- Forget that guests order cheaper dishes instead
- Give out oversized portions to make an impression
- Use more expensive ingredients without adjusting the price
First, calculate the real cost price of your promotion
Every special needs its cost calculated - just like regular dishes. Actually, it's more critical with promotions since you're working with thinner margins.
💡 Example: 3-course menu for €29.50
You launch a 3-course menu. Ingredient costs per person:
- Appetizer: €3.20
- Main course: €8.40
- Dessert: €2.10
- Bread and butter: €0.80
Total cost price: €14.50
Selling price excl. VAT: €29.50 / 1.09 = €27.06
Food cost: (€14.50 / €27.06) × 100 = 53.6%
This is way too high! Standard is 28-35%.
The formula stays the same as with regular dishes:
Food cost % = (Total ingredient costs / Selling price excl. VAT) × 100
Check the cannibalization effect
Cannibalization means guests order your promotion instead of more expensive dishes. This pattern we see repeatedly in restaurant financials - it lowers your average check, even though you're selling more covers.
💡 Example: Pasta promotion
Normally you sell pasta for €16-22. Now you offer a pasta special for €12.50.
Result after 2 weeks:
- 60% of guests choose the promotion pasta
- Only 15% still choose the €22 pasta
- Average pasta check drops from €18.50 to €14.20
You sell more pasta, but earn less per guest.
To prevent this:
- Don't make your promotion too cheap compared to your regular dishes
- Use different ingredients than your standard dishes
- Limit the duration of your promotion
- Monitor what percentage of your guests choose the promotion
Use promotions strategically to push profitable dishes
The smartest promotions actually help you earn more. By linking the promotion to profitable items.
💡 Example: Wine and food pairing
You have a steak with low food cost (28%) but it sells poorly. You create a promotion:
"Steak + glass of wine for €34.50" (normally €42.00)
- Steak cost price: €8.20
- Wine cost price: €2.80
- Total: €11.00
Selling price excl. VAT: €31.65
Food cost: 34.8% - perfect!
You sell more steak and more wine.
Other strategic promotions:
- Appetizer + main course: Push appetizers with high margin
- Dessert with 2 main courses: Increase your average check
- Lunch special: Fill quiet times with lower cost price
Monitor your promotions weekly
A promotion that works well the first week can cost you money the second week. That's why you need to keep track of how it's going.
⚠️ Watch out:
If more than 40% of your guests choose your promotion, it's probably eating into your margin. Check if your price isn't too low.
Check every week:
- What percentage chooses the promotion? More than 40% is often too much
- What's your average check? Is it dropping because of the promotion?
- Are you still selling enough profitable dishes? Watch out for cannibalization
- Is your cost price still correct? Suppliers sometimes raise prices
With a food cost calculator you can immediately see the food cost of your promotions and monitor how they perform compared to your regular dishes.
How do you create a profitable promotion? (step by step)
Calculate the exact cost price
Add up all ingredients of your special, including garnish, sauces and bread. Divide by your selling price excl. VAT and multiply by 100 for your food cost percentage.
Check if the margin is healthy
Make sure your food cost stays below 35%, preferably around 30%. Is it higher? Then you need to raise your price or adjust ingredients.
Test and monitor weekly
Keep track of what percentage of your guests choose the promotion and what it does to your average check. More than 40% promotion sales usually means problems.
✨ Pro tip
Track your promotion's performance every 3 days during the first week. If more than 35% of guests choose it by day 3, you've priced it too aggressively and need to adjust before it kills your weekly margins.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
How much discount can I give maximum without making a loss?
That depends on your normal food cost. If you normally have 30% food cost, you can give a maximum of 15-20% discount before you run into trouble. Always calculate your cost price first.
What if my promotion becomes too popular?
If more than 40% of your guests choose the promotion, it's probably eating into your margin. Then raise the price, limit availability, or stop the promotion temporarily.
Do I need to account for staff and fixed costs with promotions?
Not for food cost, but you do for your overall picture. A promotion that brings more traffic also costs more staff. Budget 25-30% of your revenue for that.
How long should a promotion run?
Maximum 2-4 weeks. Longer and it becomes normal instead of special. Plus, after 2 weeks you can properly assess whether the promotion is profitable.
Can I use promotions to clear old inventory?
Yes, but calculate what you actually save. If you need to throw away €50 worth of vegetables, a promotion with €20 discount is still €30 profit.
Should I run different promotions for lunch versus dinner service?
Absolutely - lunch crowds typically want speed and value, while dinner guests focus more on experience. Your lunch promotions can handle higher food cost percentages since labor costs are lower during slower periods.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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