Why is 'low profit, high volume' a trap for F&B businesses?

F&B is not retail. You can't store ingredients for months – they rot in days. Labor is expensive. Rent is fixed. These costs don't care about your low-price strategy.

What happens to your net profit when you run a 10% discount promotion?

If your net profit is 15%, a 10% discount drops it to 5%. To make the same RM1,500 profit, you need RM30,000 in sales – a 200% increase.

What are the hidden costs of chasing higher volume?

Your chef gets stressed. Your servers get exhausted. Without higher pay – which you can't afford because margins are gone – they quit. Low prices also start a price war with competitors.

What happens to food quality when you cut costs to afford low prices?

You eventually use cheaper ingredients, smaller portions, and less care. Food quality drops. Bad taste means lost customers. Now you have no profit and no customers.

The Biggest Lie in F&B: 'Low Profit, High Volume'

The Biggest Lie in F&B: ‘Low Profit, High Volume’

Published: 25th February 2026

Video

In this video, we answer:

What is the phrase that many people believe about F&B success?
Why is “low profit, high volume” actually a trap?
How is F&B different from retail?
Why can’t you store ingredients for months?
What happens to your net profit when you run a 10% discount promotion?
How much more sales do you need to make the same profit after a 10% discount?
What are the hidden costs of higher volume?
What happens to staff when margins are gone?
What happens to food quality when you cut costs?
What should you focus on instead of chasing volume with discounts?

Key takeaways:

The biggest F&B lie.I am sure you have heard the phrase “Low profit, high volume.” Some people say this is how F&B should operate. Let me be blunt: this could be the biggest trap you ever fall into.
Why it is different in F&B.F&B is not retail. You cannot store ingredients for months; they rot in days. You need people to cook, serve, and wash up. Labor is expensive. Rent is fixed. All these costs do not care about your low-price strategy.
The price cut trap.Let us do quick math. Say you make RM10,000 in sales with a 15% net profit – that is RM1,500 in your pocket. You run a 10% discount promotion. Now your net profit drops to 5%. To still make that same RM1,500, you now need RM30,000 in sales. That is a 200% increase. Can your kitchen handle that? Do you have the seats? The staff? No.
The hidden costs of volume.Higher volume means more work. Your chef is stressed. Your servers are exhausted. Unless you pay them more – which you cannot, because your margins are gone – they will quit. Low prices start a price war with competitors. Suddenly everyone is losing money. It is a vicious cycle.
Quality suffers, customers leave.To afford those low prices, you eventually cut costs. Cheaper ingredients. Smaller portions. Less care. Your food quality drops. In F&B, bad taste means lost customers. Now you have no profit AND no customers.
Focus on value, not discounts.Low profit, high volume sounds good in theory. In reality, it is a trap. Focus on creating real value, not chasing volume with discounts. Your restaurant’s survival depends on it.

Full transcript

(0–8 seconds) – Hook
Visual: Host looking straight at camera, serious but relatable. Text on screen: “The Biggest F&B Lie.”

Host:
“I’m sure you’ve heard the phrase ‘Low profit, high volume.’ Some people say this is how F&B should operate. Let me be blunt: this could be the biggest trap you ever fall into.”

(9–22 seconds) – Why It’s Different in F&B
Visual: Quick cuts of fresh ingredients spoiling, a busy kitchen, staff working hard. Text: “Perishable” + “Labor Heavy” + “Fixed Rent.”

Host:
“Here’s the thing—F&B is not retail. You can’t store ingredients for months; they rot in days. You need people to cook, serve, and wash up. Labor is expensive. Rent is fixed. All these costs don’t care about your low-price strategy.”

(23–40 seconds) – The Price Cut Trap
Visual: A simple whiteboard-style calculation appears: “1,500. After 10% Discount → Need 1,500.”

Host:
“Let’s do quick math. Say you make 1,500 in your pocket. You run a 10% discount promotion. Now your net profit drops to 5%. To still make that same 30,000 in sales. That’s a 200% increase. Can your kitchen handle that? Do you have the seats? The staff? No.”

(41–55 seconds) – The Hidden Costs of Volume
Visual: A tired-looking waiter, an overworked chef. Then a split screen of a price war with another restaurant.

Host:
“Higher volume means more work. Your chef is stressed. Your servers are exhausted. And unless you pay them more—which you can’t, because your margins are gone—they’ll quit. Plus, low prices start a price war with competitors. Suddenly everyone’s losing money. It’s a vicious cycle.”

(56–70 seconds) – Quality Suffers, Customers Leave
Visual: An empty restaurant, then a customer walking out looking unhappy.

Host:
“And here’s the real killer. To afford those low prices, you eventually cut costs. Cheaper ingredients. Smaller portions. Less care. Your food quality drops. And in F&B, bad taste means lost customers. Now you have no profit AND no customers.”

(71–80 seconds) – Conclusion & Call-to-Action
Visual: Host back on screen. Text: “Focus on Value, Not Discounts.”

Host:
“Low profit, high volume sounds good in theory. In reality? It’s a trap. Focus on creating real value, not chasing volume with discounts. Your restaurant’s survival depends on it.”

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