Discounts can increase orders and still reduce profit. That is the trap.
If you only track order count, promotions look successful while cash gets weaker.
Quick Take
- January 2026 U.S. CPI still shows food-away-from-home inflation pressure year over year.
- NFIB’s January 2026 data shows many small firms still navigating pricing decisions.
- Owner communities repeatedly report promo fatigue: more orders, weaker margin.
- Promo success should be measured by incremental contribution dollars, not volume alone.
The One Formula That Matters
For each promo test, calculate:
Incremental contribution =
(Promo period contribution dollars)
- (Baseline contribution dollars)
- (Promo funding cost)If incremental contribution is negative, the promo is buying revenue, not profit.
Quick Per-Order Check
Promo contribution per order =
Net collected after discount and fees
- food cost
- packaging
- channel laborCompare this to non-promo contribution per order.
Worked Example
Baseline per order:
- ticket: $24
- contribution: $9.20
Promo test:
- 20% discount
- same ticket mix
- contribution falls to $5.10
- 250 promo orders
Contribution gap = 9.20 - 5.10 = $4.10/order
Total gap = 4.10 x 250 = $1,025If the promo did not create at least $1,025 in new contribution elsewhere, it failed financially.
Channel Rule (Do This First)
Use stricter caps on high-fee channels.
Example rule:
- direct pickup: promo cap up to 12%
- in-store: promo cap up to 10%
- third-party delivery: promo cap up to 5% unless ticket floor is raised
One discount policy across all channels usually destroys delivery contribution.
Promo Types and Risk Level
- percentage off entire order: high risk
- dollar-off above threshold: medium risk
- bundle-specific promo: lower risk
- add-on upsell promo: often safest
Start with bundles and add-ons before broad percentage offers.
14-Day Test Checklist
- Define one promo objective (new guests, higher AOV, weekday fill)
- Set baseline contribution per order
- Set max promo funding budget
- Track contribution by channel daily
- Stop early if contribution trend is negative for 5 days
No success metric means no real test.
What Operators Keep Asking
In owner discussions, the recurring question is: “Do promos work, or do they just train discount-only customers?”
The answer depends on your tracking. If you measure only top-line orders, you will not know.
Related Guides
- US Menu Price Increase Playbook (2026)
- US Restaurant Direct Order vs Third-Party Margin Playbook (2026)
- US Delivery Minimum Order Playbook (2026)
- Menu Engineering Matrix Guide
KitchenCost helps you test offer scenarios against real recipe costs before running promotions live.
Sources (checked on 2026-02-14)
- BLS CPI News Release (January 2026, published February 13, 2026)
- NFIB Small Business Optimism Survey (published February 10, 2026)
- DoorDash Merchant Marketplace Plans
- Uber Eats Merchant Pricing (US)
- Reddit r/restaurantowners: “Need help pricing menu items, calculating COGS and profit margin”
- Reddit r/smallbusiness: “Small Business noob here. Looking for advice and insight about discounts and promos”