Late on a Tuesday night, Daniel was still sitting at the corner table of his second outlet.
In front of him was a supplier invoice. On his phone was a message he had already typed to his outlet managers:
“Let’s run 20% off the whole menu next month.”
His thumb hovered over send.
Should he run a promotion now, when costs are rising this fast, or finally admit that the numbers no longer add up?
It is an easy reaction.
Costs go up. Customers feel stretched. Sales feel less certain. So the brand runs another promotion.
MST Golf Group Berhad, Q2 2025 interim report, 27 Aug 2025: margin fell to 40.4% from 41.7% because softer retail conditions "necessitated more promotional activities".
But a discount is only useful if you know what you want it to do.
what the numbers say about rising costs
For brands in Malaysia, some of the pressure is visible in the data.
- Kenanga Research, 21 Sep 2026: in August 2026, chicken prices were 8.0% higher than a year earlier and tomatoes were 38.2% higher. Food and beverage inflation reached 1.9%, its highest level since September 2025. Food at home rose 1.4%, while vegetables rose 2.8%.
- Kenanga Research, 21 Sep 2026: electricity and gas costs rose 3.3% in August 2026. The fuel surcharge for Peninsular households using more than 600 kWh rose to 3.80 sen/kWh.
- Phillip Capital Research, reported by The Star, 22 Sep 2026: inflation for housing, water, electricity, gas and other fuels rose to 2.1% from 1.8%, mainly because of higher electricity tariffs under the Automatic Fuel Adjustment.
- Kenanga Research, 21 Sep 2026: domestic air travel rose 15.0% month on month, diesel rose 0.9%, petrol rose 0.8%, rentals rose 0.4% and maintenance fees rose 0.5%.
- The Star, 16 Sep 2026: Tradeview Capital fund manager Neoh Jia Man said a possible rise in the minimum wage was his biggest concern. The Star reported that it could have the “greatest negative impact” on industries including food and beverage, restaurants, retail stores and manufacturing.
None of those figures automatically tells a brand to increase menu prices or run a sales promotion.
They do explain why the decision feels harder.
The cost base is moving, and simply discounting more aggressively can put even more pressure on margins that are already being squeezed.
Fraser & Neave Holdings, results release, 5 Nov 2024: higher promotional spending, plus higher palm oil and sugar costs, cut its F&B Thailand quarterly operating profit to RM102.0 million from RM124.1 million.
how the cost of living in Malaysia is changing what customers spend
The other side of the pricing strategy is the customer.
- Bank Negara Malaysia, Annual Report 2025, March 2026: from 2019 to 2024, Malaysia’s headline consumer price index rose 9.3%, while nominal wages per worker grew 7.2%.
- Department of Statistics Malaysia, June 2026: Malaysia’s consumer price index stood at 137.1 points in May 2026, up from 134.4 a year earlier. Headline inflation was 2.0%. Food and beverage inflation was 1.4%.
- Oppotus, Malaysians on Malaysia report, 17 Aug 2026: in Oppotus’s quarterly consumer survey, the Malaysian Consumer Confidence Index fell from 135 to 123 points between Q1 and Q2 2026.
- Oppotus, 17 Aug 2026: economic sentiment fell from 130 to 116 points between Q1 and Q2 2026, while sentiment towards major purchases fell from 121 to 103 points.
- Oppotus, 17 Aug 2026: in Q2 2026, online shopping fell from 81% to 78%, livestream buying held at 34%, while domestic travel rose 4 points to 46%.
- HLIB Research, reported by The Star, 30 Sep 2026: consumer confidence in 2Q26 was at its lowest since 4Q22, “but spending did not follow”. Private consumption still grew 4.8% year on year and retail trade grew 6.7%.
The useful part is the combination.
Customers are not reacting to food prices alone. They are reacting to built-up cost-of-living pressure and worries about their own finances.
They are still spending.
They are simply becoming more careful about where the money goes.
Bank Negara Malaysia, Economic and Monetary Review 2025: private-sector wage growth lagged food and drink inflation, "causing prudent households to slow their consumption".
That changes the question for a brand. It is no longer just, “How do we make this cheaper?”
It becomes, “How do we make the value clearer without unnecessarily giving margin away?”
a smarter sales promotion in 5 steps
Daniel did not send the whole-menu discount.
Instead, he opened his menu and looked for somewhere a promotion could actually teach him something.
That is the better starting point.
1. do not discount what already sells
Start with the obvious mistake.
Do not automatically discount your whole menu. And do not start with the bestsellers people are already happy to order.
If a dish already has strong demand, reducing its price may simply mean accepting less margin for a purchase that would have happened anyway.
Ailawadi et al., Marketing Science, 2007: in a study of CVS promotions, only about 45% of the sales lift was new demand, and more than half of the promotions were not profitable.
Protect the prices customers already use to judge your brand.
A promotion should have a job.
“Make everything cheaper” is usually too broad a job.
2. find a high-margin dish that people overlook
Look instead for something that has decent margin but low sales.
In menu planning, this is sometimes called a “puzzle”: the economics can work, but customers are not choosing it.
If you know the Boston matrix, the thinking may feel familiar: you are looking at performance through two dimensions rather than treating every menu item the same.
Menu engineering, developed by Kasavana and Smith in 1982, adapted the Boston Consulting Group's growth-share matrix to menus (Deturope, 2022). It sorts every dish into four boxes:
- Stars sell well and earn well, so keep them as they are.
- Ploughhorses sell well but earn little, so lift the price carefully or cut the cost.
- Puzzles earn well but sell little, so make them easier to notice.
- Dogs sell little and earn little, so replace or remove them.
The promotion in this post is aimed at a puzzle.
The important question is why.
- Maybe the name is unclear.
- Maybe the description does not explain what makes it good.
- Maybe the photo is weak.
- Maybe staff rarely recommend it.
- Maybe customers simply do not understand what they are looking at.
Those are possible reasons, not conclusions. The point of the promotion is to find out which one actually matters.
- McCall and Lynn, Journal of Foodservice Business Research, Dec 2008: fuller menu descriptions raised how diners rated a dish's quality and the chance they chose it.
- Cai, Chen and Fang, American Economic Review, 2009: showing diners which dishes were most popular lifted demand for those dishes by 13% to 18%.
That is a much more useful place to run a promotion.
You are not only trying to sell more of the dish. You are creating a reason for more customers to try it so the brand can understand what is holding it back.
3. decide what you want to learn first
Before the offer goes live, write down the questions. Keep them simple:
- Do customers understand the name?
- Does the menu description make the dish clear?
- Does the portion feel right?
- Would they order it again?
That changes how the promotion is managed.
Now the sales promotion is not just an offer. It is a test.
Daniel briefed his managers and floor staff before launch.
Everyone knew the promotion mechanics, but they also knew what the brand needed to learn.
4. ask one question at the table
When the staff cleared the plate, they asked:
“Would you order this again?”
But the process did not stop with that one line.
The staff member clearing the plate asked it naturally, while the meal was still fresh in the customer’s mind. It was part of the normal conversation at the table, not a formal survey.
If the answer was yes, they left it there.
If the answer was no or maybe, they followed with one short question: “What would make it better?”
The point was not to interrogate the customer. It was to understand what sat behind the answer.
At the end of each shift, the answers were noted so the manager could compare what customers were saying across the two-week promotion.
That gave Daniel something more useful than a busy outlet. He had repeated customer feedback he could actually work with.
5. fix the problem, then stop the promotion
Review what customers said:
- If the name is confusing, change it.
- If the menu description is weak, rewrite it in plain language.
- If the plating makes the portion look poor, review the presentation.
- If staff do not know how to recommend the dish, improve the briefing.
Then end the promotion.
This is important.
The next test is whether people will still order the dish at full price.
If they do, the promotion helped remove a barrier.
If they do not, you still learnt something before spending months pushing an item the market does not want.
Keep it, fix it or drop it.
That is a clearer decision than running the same discount again because the first one produced a crowd.
why the second visit matters more than the first crowd
There is another useful question to ask before running any promotion:
What happens after the first visit?
One US chain offers a useful example, although it should not be treated as a universal rule.
BJ’s Restaurants, reported by FSR magazine, 1 Oct 2026: the chain used to give new loyalty members a free Pizookie dessert when they signed up.
FSR reported that the offer was driving trial but not necessarily second visits.
So the brand moved the reward to the next visit.
Fewer people signed up, but more returned “a lot more often”. FSR reported that loyalty members increased average frequency from just under two visits a year to closer to four. Chief executive Lyle Tick also said loyalty member numbers “can often be a vanity metric”.
The point is not that every Malaysian brand should copy BJ’s or build the same loyalty programme.
The useful question is simpler.
Are you using the promotion to create one cheap visit, or to give somebody a reason to come back?
Those are very different outcomes.
If you already have a first-visit offer, consider whether the stronger reward should sit on the second visit instead.
The first crowd looks good.
The second visit tells you more.
a pricing strategy that explains the value before cutting the price
Sometimes a customer does not need the price to be lower.
They need a clearer reason to believe the price is worth paying.
One US cafeteria study offers a useful hint.
Mohan, Buell and John, Marketing Science, 2020: in a field study at a US cafeteria, diners were 21.1% more likely to buy chicken noodle soup when the sign revealed what it cost the cafeteria to make it.
That is one cafeteria in one country. It is a hint, not a rule.
But the broader point is useful for brands dealing with cost-of-living pressure.
Before reducing the price, ask whether the customer properly understands the value.
- Does the menu explain the dish?
- Can staff describe why it is different?
- Is the portion clear?
- Does the customer understand what they are paying for?
A pricing strategy should not depend on customers guessing why something costs what it costs.
Sometimes better explanation does more than another percentage-off graphic.
a promotion checklist before you go live
The easiest mistake is to run another promotion because the last one filled the room.
But if you cannot explain what happens after the offer ends, you may be paying for a crowd that never gives you anything back.
If a promotion goes wrong, you often find out only after the margin is gone and the crowd has moved on.
And one principle matters through all of it:
Know your customers. Talk to them and involve them, especially when you decide what stays on the menu.
Chang and Taylor, Journal of Marketing, 2016: involving customers early in new product ideas improves financial results.
Daniel still runs promotions.
He just does not run them as a reflex whenever costs rise or sales feel uncomfortable.
Now the brand asks what the promotion needs to achieve, what it needs to learn and what should happen when the offer ends.
If you are reviewing your pricing strategy, planning a promotion or trying to work out why customers are not responding the way you expected, northmark offers a complimentary 30-minute assessment and the full northmark 360 brand marketing assessment (T&Cs apply).
