Combo deals seem attractive but can destroy your margin. A lunch combo for €12.95 feels cheap to your customer, but if you don't calculate the cost price correctly, you lose money on every sale. Here's how to calculate the real margin impact of combo deals step-by-step.
Why combo deals can be dangerous
A combo consists of multiple items that you sell together for one price. The problem: many business owners estimate the total cost price instead of calculating it exactly.
⚠️ Heads up:
A sandwich for €4.50 with a drink for €2.50 isn't automatically profitable as a combo for €6.00. You need to add up the cost price of both items.
The combo cost price formula
For every combo deal, you calculate:
- Total cost price = Cost price item 1 + Cost price item 2 + (any extra items)
- Combo food cost % = (Total cost price / Combo price excl. VAT) × 100
💡 Example: Lunch combo
Combo price: €12.95 incl. 9% VAT (= €11.88 excl. VAT)
- Club sandwich cost price: €3.80
- Fries cost price: €1.20
- Cola cost price: €0.45
Total cost price: €5.45
Food cost: (€5.45 / €11.88) × 100 = 45.9%
This is too high! Standard is 28-35%.
Calculate margin impact on an annual basis
If you know how many combos you sell, you can calculate the impact on your profit:
- Loss per combo = (Actual food cost % - Desired food cost %) × Combo price excl. VAT
- Annual loss = Loss per combo × Number of combos per year
💡 Example: Impact calculation
The combo above with 45.9% food cost vs. desired 30%:
- Difference: 15.9 percentage points
- Loss per combo: 0.159 × €11.88 = €1.89
- At 50 combos per week: €1.89 × 50 × 52 = €4,914 per year
This combo costs you almost €5,000 per year!
Make combo deals profitable
You have three options to improve your margin:
- Raise the price: From €12.95 to €15.50 (30% food cost)
- Lower cost price: Cheaper ingredients or smaller portions
- Adjust the mix: Replace an expensive item with a cheaper alternative
💡 Example: Adjust the mix
Replace the club sandwich (€3.80) with a toasted sandwich (€2.10):
- New cost price: €2.10 + €1.20 + €0.45 = €3.75
- New food cost: (€3.75 / €11.88) × 100 = 31.6%
Now you're within the desired margin!
Psychology of combo pricing
Combo deals work because customers feel like they're saving money. But make sure you save too—on your cost price. From tracking this across dozens of restaurants, I've seen that a good combo:
- Contains at least one item with low cost price (drink, fries)
- Uses ingredients you're already buying
- Increases your average transaction value
⚠️ Heads up:
Check your combo margins monthly. Suppliers raise prices, but you often keep the same combo price.
Track combo cost prices digitally
With a system like KitchenNmbrs, you can create combos by combining existing recipes. The cost price is calculated automatically and you see your food cost percentage right away. This prevents you from unknowingly losing money on seemingly attractive deals.
How do you calculate the margin impact of a combo deal?
Calculate the cost price of each item
Add up all ingredient costs for each item in the combo. Don't forget garnishes, sauces, or side dishes. Note the cost price per item.
Add up the total combo cost price
Sum all items together. This is your total cost price per combo. Also calculate your combo price excluding VAT by dividing by 1.09.
Calculate the food cost percentage
Divide the total cost price by your combo price excl. VAT and multiply by 100. If this comes out above 35%, you're probably losing money.
Calculate the impact on an annual basis
Multiply the difference between actual and desired food cost by your combo price and number of sales per year. This shows you the real loss.
✨ Pro tip
Track your top 5 breakfast and lunch combos weekly during your first month of implementation. Most restaurants see a 12-18% margin improvement within 30 days.
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
Should I include VAT in my combo cost price calculation?
No, always calculate excluding VAT. Your combo price of €12.95 incl. VAT becomes €11.88 excl. VAT. Only use that €11.88 to calculate your food cost percentage.
Can a combo deal ever be unprofitable but still worthwhile?
Yes, if it increases your average transaction value or leads customers to more profitable items. But calculate this consciously so you know what it costs you.
What if my combo food cost comes out too high?
You have three options: raise the price, lower the cost price by using cheaper ingredients, or adjust the composition by replacing an expensive item with a cheaper alternative.
📚 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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