Restaurant Happy Hour Calculator

Happy Hour discount — with food cost at 30% and drink cost at 20%, can you still make money?

$
%
%
%
%
%
%
Normal Profit per Table
Food revenue$36.00
Drink revenue$24.00
Food profit$25.20
Drink profit$19.20
Total$44.40
Happy Hour Profit per Table
Total$39.36
Profit Change per Table
per table-$5.04
%-11.4%
With Traffic Increase (per 100 covers)
Normal total (100 covers)$4,440
Happy Hour total$4,920
Net change+$480
Calculating...
Ad Space

The Restaurant Discount Math: Drinks vs Food

The secret to profitable Happy Hour pricing lies in understanding the massive margin difference between food and drinks. Drinks carry 70-80% gross margins, while food typically runs only 30-40% gross margins. This means discounting drinks is far safer than discounting food.

Drink profit at 20% off: $18 × 80% margin = $14.40 | Food profit at 20% off: $36 × 70% margin = $25.20

A 20% discount on a $10 cocktail (80% margin) still leaves you $6.40 in gross profit. The same 20% discount on a $15 entree (35% margin) leaves only $4.75 — and that margin has to cover labor, rent, and everything else.

Happy Hour Strategy Table

Discount %Food-Only Profit ImpactDrink-Only Profit ImpactCombined Impact
10%-25% to -29%-12% to -14%-17% to -20%
15%-38% to -43%-19% to -21%-26% to -30%
20%-50% to -57%-25% to -29%-34% to -40%
25%-63% to -71%-31% to -36%-43% to -50%

Notice how food discounts hit profits 2-3x harder than drink discounts at every level. A 20% food discount can wipe out over half your food profit, while the same discount on drinks takes only a quarter.

Smart Restaurant Discount Strategies

Drink-only discounts: Offer 15-25% off cocktails and draft beer. With 70-80% margins, drinks absorb discounts best. The lost margin per drink is small, and increased traffic drives food orders at full price.

App/coupon-based food discounts during slow hours: Use targeted offers (10% off appetizers, 3-5 PM only) to fill dead hours without cannibalizing your dinner rush. Track redemption rates to measure incremental traffic.

"Buy entree, get drink X% off" combos: This protects your food margin while using drink discounts as a draw. The full-price entree anchors the ticket, and the discounted drink feels like a bonus — not a devaluation of your brand.

Calculate any price with our 10% Off Calculator →

Frequently Asked Questions

Drinks absorb discounts far better due to 70-80% gross margins vs 30-40% for food. A 20% discount on drinks costs you roughly 4-6 cents per dollar of revenue, while the same discount on food costs 12-14 cents. Focus discounts on drinks and keep food at or near full price.
It depends on your margin mix, but typically you need 15-25% more covers to break even on a 10% across-the-board discount. If you discount only drinks (higher margin), you may need as little as 10-15% more traffic. Use the calculator above with your actual costs to find your exact threshold.
Drink-focused: 15-25% off cocktails and draft beer, 0-10% off appetizers only, and full price on entrees. This leverages drink margins (70-80%) to absorb the discount while driving food orders at full margin. Many successful bars offer $2-3 off specific drinks rather than a percentage.
Some cannibalization occurs, but research shows 60-70% of Happy Hour traffic is incremental — people who wouldn't have come otherwise. To minimize cannibalization, limit HH to truly slow hours (3-6 PM), offer a separate HH menu, and end it sharply before dinner service begins.
Ad Space