Marketing promotions fill your restaurant, but often squeeze your margins. While a packed dining room feels rewarding, discounted covers can deliver less profit than a half-empty restaurant charging full price. The key is understanding your actual profit per promotion before you launch it.
Why marketing promotions are dangerous for your margins
A bustling restaurant creates great energy. But offer 20% off and you'll need 25% more sales just to break even. That math rarely works out.
? Example:
Regular evening: 60 covers at €25 average = €1,500 revenue
Promotion evening: 90 covers at €20 average (20% off) = €1,800 revenue
Higher revenue, but what about profit?
Your cost structure determines everything. With 30% food costs and €800 fixed costs per evening:
- Regular evening: €1,500 - (€450 food) - (€800 fixed) = €250 profit
- Promotion evening: €1,800 - (€540 food) - (€800 fixed) = €460 profit
This promotion actually works. But add extra staff for those 30 additional covers? Your profit disappears fast.
Calculate the real impact of discounts
Every marketing promotion needs three calculations:
- Break-even threshold: Exactly how much extra volume do you need?
- Variable costs: Additional staff, ingredients, utilities
- Service capacity: Can you actually serve those extra guests well?
? Break-even calculation:
A 20% discount requires 25% more sales for identical profit:
- Formula: Discount % ÷ (100% - Discount %) = Required sales increase
- 20% ÷ 80% = 0.25 = 25% sales boost needed
Alternatives to pure discounts
Rather than slashing prices, add perceived value:
- Complimentary side dish: Costs you €2-3, feels like €8-10 savings to guests
- Free drink with entree: Wine has minimal cost but massive perceived value
- Complimentary dessert: High perceived value, low actual cost
- Half-price second course: Drives higher average checks
⚠️ Watch out:
Frequent discounts train guests to expect lower prices. They'll view your regular rates as overpriced. Plan your exit strategy upfront.
Timing of marketing promotions
Smart promotions target naturally slow periods:
- Monday/Tuesday: Fixed costs continue regardless, every additional guest contributes
- Early service: 5:00-6:30 PM typically sees lighter traffic
- Seasonal lulls: January doldrums, post-holiday periods
Friday and Saturday promotions waste potential revenue. You'll fill those seats at full price anyway.
? Smart promotion:
Weekday early bird 5:00-6:30 PM:
- Entree + wine glass €22 (regular €30)
- Draws early diners, clears tables for full-price later service
- Converts empty seats to revenue
Measure the results of every promotion
Most kitchen managers discover too late that they never tracked the metrics that actually matter. Monitor each promotion's:
- Total revenue compared to typical service
- Cover count versus baseline
- Average guest check
- Net profit (revenue means nothing without this)
- Additional expenses (labor, food costs)
Without these numbers, you're guessing whether promotions help or hurt your bottom line.
Stopping unsuccessful promotions
End marketing promotions that:
- Generate lower profits than regular service
- Create discount-dependent customers
- Overwhelm your service team
- Compromise food quality due to volume pressure
⚠️ Watch out:
A packed restaurant serving subpar food due to kitchen stress damages your reputation more than a quiet evening with exceptional service.
Related articles
How do you calculate if a marketing promotion is worth it?
Calculate your break-even point
Use the formula: Discount % ÷ (100% - Discount %) = Extra sales % needed. With 25% off, you need 33% more sales to earn the same.
Add up all extra costs
Don't just calculate extra food cost, but also extra staff, energy, and dishwashing. A full restaurant costs more than just the ingredients.
Compare profit per guest
Divide your total profit by the number of covers. If this is lower than on normal days, you're earning less despite the rush.
✨ Pro tip
Track profit per promotion guest for 4 weeks, not just revenue increases. A promotion that fills 85% capacity but generates 15% less profit per person is slowly killing your margins.
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Frequently asked questions
How much discount can I give maximum?
Why does a promotion fill my restaurant but I earn less?
What's better: discount on the bill or free side dish?
How do I know if a promotion is successful?
When are discount promotions actually smart?
Should I run promotions on social media or through email lists?
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
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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