Lunch discounts can destroy your margin without you noticing. Many restaurant owners think a lower price is automatically compensated by more volume, but that's often not the case. In this article you'll learn exactly how to calculate whether your lunch offer is still profitable.
Calculate your break-even point for lunch discounts
Before you offer a discount, you need to know what you need at minimum to break even. This is your break-even point per dish.
💡 Example:
Your club sandwich normally costs €14.50 (incl. 9% VAT):
- Selling price excl. VAT: €13.30
- Ingredient costs: €4.20
- Food cost: 31.6%
With 20% lunch discount: €11.60 incl. VAT = €10.64 excl. VAT
New food cost: €4.20 / €10.64 = 39.5%
If your food cost goes above 35%, you're probably losing money on that dish. You'll need to run more volume to earn the same amount.
Check if more volume compensates for your loss
A lower margin per dish can be okay if you generate enough extra sales. Here's the formula:
Required volume increase = (Old margin - New margin) / New margin × 100
💡 Example:
Club sandwich calculation:
- Old margin per unit: €13.30 - €4.20 = €9.10
- New margin per unit: €10.64 - €4.20 = €6.44
- Difference: €9.10 - €6.44 = €2.66 less per unit
Required volume increase: €2.66 / €6.44 × 100 = 41.3%
You need to sell 41% more club sandwiches to earn the same amount.
⚠️ Note:
If you normally sell 20 club sandwiches per day, you now need to sell 28 to earn the same. Realistic? Check your historical numbers.
Account for extra costs at higher volume
More guests often means more costs you don't see at first:
- Extra staff: More busy periods might mean you need an extra cook or server
- Ingredient purchasing: Larger quantities, but do you also get a discount from your supplier?
- Energy costs: More equipment usage
- Waste and spoilage: With more volume, more often goes wrong
Include these in your break-even calculation. A rule of thumb: add 5-8% extra costs for higher volumes.
Test your lunch offer with real numbers
The best way to know if your discount works? Measure it. Compare a normal week with a discount week:
💡 Example:
Week without discount:
- 100 club sandwiches × €9.10 margin = €910 profit
Week with 20% discount:
- 140 club sandwiches × €6.44 margin = €901.60 profit
Result: €8.40 less profit despite 40% more sales
This example shows why you always need to calculate. More sales doesn't automatically mean more profit.
Alternatives to deep discounts
Instead of lowering your price, you can also:
- Combo deals: Sandwich + soup for €16.50 instead of €18.50 separately
- Free extras: Free coffee with lunch (costs you €0.35, feels like €2.50 value)
- Loyalty program: Every 10th lunch free (spreads the discount)
- Happy hour times: Discount only between 11:30-13:00 when you're quiet anyway
These alternatives protect your margin better than a straight price reduction.
⚠️ Note:
Also check what discounts do to your dinner prices. Guests might start expecting lunch to always be cheap, causing them to skip dinner.
Use a system to keep track of this
Calculating manually whether your discounts work takes a lot of time. A system like KitchenNmbrs shows you directly what each dish generates, even with discounts. That way you see in real-time if your promotion is still profitable.
How do you calculate if your lunch discount stays profitable?
Calculate your current margin per dish
Subtract your ingredient costs from your selling price (excl. VAT). This is your margin per dish. For example: €13.30 - €4.20 = €9.10 margin.
Calculate your new margin with discount
Apply the discount to your selling price and calculate the new margin. With 20% discount €13.30 becomes €10.64, so new margin = €10.64 - €4.20 = €6.44.
Check how much extra sales you need
Divide the margin difference by the new margin × 100. In the example: (€9.10 - €6.44) / €6.44 × 100 = 41.3% more sales needed to break even.
✨ Pro tip
Check your lunch discounts every month with real numbers. What worked in January might be unprofitable in March due to changed purchasing prices or seasonal effects.
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 a safe food cost for lunch dishes with discount?
Try to stay under 35%, even with discount. If you go above that, you'll need to run significantly more volume to earn the same amount.
How do I know if my lunch discount is successful?
Compare your total lunch profit from a normal week with a discount week. More sales doesn't automatically mean more profit if your margin drops too much.
Should I calculate with price including or excluding VAT?
Always excluding VAT for cost price calculations. The price on your menu is including 9% VAT, but for your margin you calculate excl. VAT.
What if my supplier gives a discount on larger purchases?
Include those savings in your calculation. If your ingredient costs drop from €4.20 to €3.90 due to volume discount, your margin improves significantly.
Is a combo deal better than a straight discount?
Usually yes. A sandwich + soup combo protects your margin better than 20% off the sandwich alone. You sell more items at a smaller discount.
📚 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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