Seasonal promotions on ordering platforms appear enticing, but actual costs often exceed expectations. Beyond standard commission, you'll face discounts, additional marketing expenses and heightened customer expectations. Master the calculations to determine true promotion costs and profitability thresholds.
What does a seasonal promotion really cost?
A seasonal promotion on platforms like Thuisbezorgd or Uber Eats involves multiple cost layers that require careful calculation. Most restaurant owners focus solely on the discount they're offering while overlooking platform commission and additional expenses.
💡 Example: Summer pizza promotion
Your standard margherita pizza sells for €12.50. Summer promotion offers 20% discount.
- Promotion price: €10.00
- Platform commission (25%): €2.50
- Your revenue: €7.50
- Ingredient costs: €3.20
Actual margin: €4.30 (57% food cost!)
The hidden costs of promotions
Beyond discount and commission, several additional expenses emerge during promotional periods:
- Higher packaging costs: Promotional periods drive order volume up, requiring more containers and delivery bags
- Additional staffing: Busy promotional periods demand extra kitchen and delivery personnel
- Quality compromises: Rushed service can trigger mistakes, creating replacement costs
- Inventory risks: Increased stock purchases carry waste potential
⚠️ Attention:
Commission calculations must use post-discount pricing. Platforms calculate commission on customer payment amount, not your regular menu price.
Formula for real costs
Apply this formula to determine exact promotional costs:
Actual revenue = (Promotion price × (100 - Commission%)) / 100
True food cost% = (Ingredient costs / Actual revenue) × 100
💡 Example: Step-by-step calculation
Regular price: €15.00 | Promotion: 30% discount | Commission: 25%
- Promotion price: €15.00 × 0.70 = €10.50
- Actual revenue: €10.50 × 0.75 = €7.88
- With €4.50 ingredients: (€4.50 / €7.88) × 100 = 57% food cost
Result: Food cost exceeds acceptable limits, promotion loses money
Determining promotion profitability
Promotions remain profitable only if actual food cost stays under 35%. Work backwards from your maximum food cost to establish minimum promotional pricing.
Minimum promotion price = (Ingredient costs / 0.35) / (1 - Commission%)
💡 Example: Calculate minimum promotion price
Ingredients cost €4.50, commission runs 25%, targeting maximum 35% food cost.
- Minimum revenue: €4.50 / 0.35 = €12.86
- Minimum promotion price: €12.86 / 0.75 = €17.15
Pricing must reach at least €17.15 for profitability
Volume increases vs. reduced margins
Promotions can generate profits through increased volume despite lower per-dish margins. From analyzing actual purchasing data across different restaurant types, total impact calculations prove essential:
- Regular week: 100 pizzas × €8.30 margin = €830
- Promotional week: 200 pizzas × €4.30 margin = €860
This promotion generates €30 additional profit despite reduced per-pizza margins. But monitor staffing and inventory expenses carefully.
⚠️ Attention:
Customers who order exclusively during promotions rarely become loyal patrons. Don't expect them returning at regular prices.
Digital calculation assistance
These calculations become complex and error-prone when done manually. Tools like a food cost calculator can automatically compute how different promotional prices affect your food cost and profitability.
Enter the promotion price and commission percentage to instantly see if dishes remain profitable. This enables quick decisions about promotional financial viability.
How do you calculate the real costs of a seasonal promotion?
Gather all cost data
Note your normal selling price, ingredient costs per dish, the promotion discount percentage and the platform commission. Don't forget to include extra costs like increased packaging costs and possibly extra staff.
Calculate your real revenue
First subtract the discount from your normal price to get the promotion price. Then subtract the platform commission from this promotion price. Formula: (Promotion price × (100 - Commission%)) / 100.
Check your food cost percentage
Divide your ingredient costs by your real revenue and multiply by 100. If this comes out above 35%, you're losing money on the dish. Also calculate the total effect: more volume can compensate for lower margin per dish.
✨ Pro tip
Test seasonal promotions on pasta dishes first - they typically maintain 22-28% food cost even with 25% discounts and platform commissions. Run a 72-hour test before committing to longer promotional periods.
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
Do I need to include VAT in my promotion calculation?
No, calculate excluding VAT always. Platform prices include VAT, but food cost calculations use the price excluding 9% VAT.
How often can I run promotions without spoiling customers?
Limit promotions to maximum 1-2 times per quarter. Excessive promotions train customers to order only during discounts, undermining regular revenue streams.
What if my competitor is also running a promotion?
Focus on your numbers, not competitor actions. Unprofitable promotions designed to match competition ultimately cost more than missed orders.
Can I deduct the platform commission from the discount?
No, platforms calculate commission on customer payment amounts. You cannot offset commission with your discount percentage.
How do I prevent losing money on promotions?
Calculate minimum promotion prices beforehand to maintain 35% food cost limits. Use this formula: (Ingredient costs / 0.35) / (1 - Commission%).
Should I promote high-margin dishes or popular items?
Promote dishes with lowest ingredient costs first. Pizza and pasta work better than seafood or premium cuts due to inherently lower food cost percentages.
What's the break-even point for promotional volume increases?
You need at least 40% order volume increase to offset a 20% discount with 25% commission. Track actual volume lifts against these thresholds during your first week.
📚 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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