Promotions with discounts seem unprofitable, but can be profitable if you calculate the numbers correctly. Many pizzeria owners assume discounts always cost money, but forget that higher volume also has benefits. In this article, you'll learn step-by-step how to calculate the real margin on pizzas you sell at a discount.
Why promotions are often surprisingly profitable
A pizza with 30% off seems unprofitable. But three things happen that can save your margin:
- More volume: You sell more pizzas per evening
- Add-on sales: Customers often order drinks and sides with it
- Spreading fixed costs: Your oven, staff, and rent cost the same whether you sell 50 or 100 pizzas
💡 Example:
Margherita pizza normally €12.50 (incl. 9% VAT), with 30% off €8.75:
- Selling price excl. VAT: €8.02
- Ingredient costs: €2.80
- Food cost: 34.9%
Still within acceptable range for promotions.
The complete calculation per pizza
For a correct margin calculation, you need these figures:
- Ingredient costs: Dough, tomato sauce, cheese, toppings
- Packaging costs: Box, napkin (for takeaway/delivery)
- Discount in euros: Not in percentage
⚠️ Note:
Always calculate with the price excl. VAT. The €8.75 on your menu is incl. 9% VAT = €8.02 excl. VAT.
The formula stays the same as with regular prices:
Food cost % = (Total costs per pizza / Selling price excl. VAT) × 100
Including add-on sales in your calculation
Promotions work because customers often order more. So calculate your average order value during promotional periods:
💡 Example order value:
- Pizza with discount: €8.75
- Drink: €3.50
- Side dish: €4.50
Total order: €16.75 instead of just €8.75
Now you calculate the margin over the entire order, not just the discounted pizza.
Volume effect on fixed costs
More pizzas means your fixed costs (rent, staff, energy) are spread over more sales. This improves your overall profitability, even if the margin per pizza is lower.
- Normal evening: 60 pizzas, fixed costs €300 = €5 per pizza
- Promotion evening: 90 pizzas, fixed costs €300 = €3.33 per pizza
The difference of €1.67 per pizza can (partly) offset the discount.
When promotions are really unprofitable
Watch for these signals that your discount is too high:
⚠️ Stop the promotion if:
- Food cost rises above 45% (including packaging)
- Customers only order the discounted pizza (no add-on sales)
- Your team can't handle the volume (quality drops)
KitchenNmbrs for promotion calculations
With a system like KitchenNmbrs, you automatically calculate the food cost of your pizzas, even with discounts. You immediately see if a promotion remains profitable and can test different discount percentages before offering them.
How do you calculate margins on discounted pizzas? (step by step)
Calculate your ingredient costs per pizza
Add up all costs: dough, tomato sauce, cheese, toppings, packaging. Don't forget small things like olive oil and spices. This is your base cost price.
Convert the discount price to excl. VAT
Divide the price after discount by 1.09 to get the price excl. VAT. A pizza of €8.75 incl. VAT becomes €8.02 excl. VAT. Use this to calculate further.
Calculate food cost percentage and check add-on sales
Divide ingredient costs by selling price excl. VAT and multiply by 100. Also check your average order value: do you make it back on drinks and sides?
✨ Pro tip
Always check your average order value during promotions. If customers order €6 worth of drinks along with the €8.75 pizza, you earn more than with a normal €12.50 pizza without add-on sales.
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
What is an acceptable food cost for discounted pizzas?
For promotions, 35-40% food cost is acceptable, higher than the normal 25-30%. You make it back through volume and add-on sales.
Should I include packaging costs in my calculation?
Yes, especially for delivery and takeaway. A pizza box costs €0.35-0.50 and counts toward your cost price per pizza.
How do I know if my promotion is profitable?
Compare your total profit per day: normal day vs. promotion day. If you make more total profit despite lower margin per pizza, it works.
Can I run promotions every week?
Not recommended. Customers will then only order on promotion days. Limit it to 1-2 times per month.
Which discount percentages are still profitable?
Usually up to 30-35% off, depending on your normal food cost. Test different percentages and measure the result.
📚 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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