High revenue doesn't always mean high profit. Many hospitality entrepreneurs see promotions and seasonal offers as revenue boosters, but forget that margins often come under pressure. You can be busy and still lose money without realizing it.
Why revenue can be misleading
A full restaurant feels good. But if you generate €1000 extra revenue with promotions where you only make 5% margin, you earn just €50. You could have spent that same time on dishes with 25% margin.
💡 Example:
Summer terrace promotion: 3-course menu for €24.95
- Normal price: €39.50
- Ingredient costs: €18.50
- Normal margin: €21.00 (53%)
- Promotion margin: €6.45 (26%)
Per promotion menu you lose €14.55 in margin
The hidden costs of promotions
Promotions cost more than just the lower price. You often need:
- More purchasing: larger volumes, but at the same purchase prices
- Extra staff: busier service requires more hands
- Higher energy costs: kitchen runs at full capacity
- More waste: if you underestimate demand
How to measure real profitability
Don't just look at revenue, but at contribution per hour. This gives you insight into what you actually earn per unit of time.
💡 Example calculation:
Friday evening (6-hour service):
- Revenue: €2400
- Food cost: €720 (30%)
- Staff costs: €480
- Other costs: €200
Profit per hour: (€2400 - €1400) / 6 = €167/hour
Warning signs of low-margin promotions
Watch for these red flags:
- Food cost rises above 35% during promotions
- More stress, same bank account: team works harder but results stay the same
- Suppliers ask for faster payment: cash flow under pressure from lower margins
- Fixed costs feel heavier: rent and insurance stay the same while profit drops
⚠️ Heads up:
Seasonal promotions can become addictive. Guests get used to lower prices and come less often at regular rates. You create a negative spiral.
Alternative strategies for seasonal revenue
Instead of price promotions, you can also:
- Offer added value: free amuse, welcome drink, or extra course
- Create bundles: wine-food pairings at attractive prices but maintain margin
- Fill off-peak times: Monday evening second course free, but only then
- Use seasonal ingredients: cheaper purchasing = better margin at regular price
💡 Example smart promotion:
Asparagus season (April-June):
- Asparagus: €8/kg (cheap season)
- Asparagus dish: €22.50 regular price
- Food cost: 25% (lower than average)
- Marketing: "Fresh asparagus season has started!"
Higher revenue AND higher margin through smart purchasing
Tools to keep track
Manually tracking margin per promotion takes a lot of time. A system like KitchenNmbrs automatically calculates your food cost per dish, even during promotions. This way you immediately see if a promotion is profitable or costs you money.
How do you analyze the profitability of promotions?
Calculate the real margin per dish
Add up all ingredient costs and divide by the selling price excluding VAT. For promotions, do this for both the regular price and the promotion price.
Measure revenue and profit per time period
Compare not just revenue figures, but also absolute profit. Lower revenue with higher margin can generate more than high revenue with low margin.
Analyze the total costs of the promotion
Add extra staff costs, energy costs, and any marketing costs to the lower margin. This gives you the complete picture of what the promotion actually costs.
✨ Pro tip
Check your 3 best-selling dishes during promotions extra carefully. If those come under pressure, it has the biggest impact on your overall profitability.
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 margin during seasonal promotions?
Try to stay above 20% food cost, even during promotions. If you go below 15% net margin, you're probably not earning enough to cover all costs.
How often should I check my promotion profitability?
Check at least weekly during a promotion period. This way you can adjust if the margin gets too low or volumes fall short.
Should I avoid promotions altogether?
No, but choose strategically. Promotions to attract new guests or fill quiet periods can be worthwhile, as long as you keep an eye on the margin.
How do I prevent guests from only coming during promotions?
Limit promotions in time and frequency. Make it a real seasonal event rather than a monthly repeat. Focus on added value instead of lower prices.
Which figures are most important to track?
Food cost percentage, revenue per hour, and absolute profit per day. These three figures give you a complete picture of your profitability.
📚 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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