Restaurants take the offline route

Business National

Deep discounts provided by various food delivery applications have become a reason for restaurants to withdraw their collaboration with them.

By Shubhangi Mathur

In the wake of #logout campaign launched by National Restaurants Association of India (NRAI), more than 2500 restaurants have logged out of the food delivering aggregators across the nation.

Many restaurants are backing off from such applications like Zomato, Swiggy, DineOut due to the deep discounts provided by them and the loss incurred because of the same.

NRAI has initiated a campaign called, #Logout campaign aiming at the withdrawal of restaurants from such apps. The association says that these food delivery aggregators are crippling the industry and making people addicted to discounts.

Anurag Katriar, Head of NRAI Mumbai Chapter said in a press release, “All the standalone and chain restaurateurs across India have displayed their strong resentment on the prevailing concerns such as deep discounting, data masking, high and uneven commission charges by online food aggregators. There is a very strong demand to immediately extend the #Logout movement to the online delivery vertical as well.”

“However, as a responsible industry body, we want to actively engage with these delivery aggregators to find a solution. We are not against the technology platforms, but our concerns are largely around these aggregators misusing their dominant position to indulge in predatory behaviour; commercially and informing the terms of engagement,” he added.

Restaurants across the country had collaborated, in the past, with different food delivery applications to represent them on online platforms. The idea of the collaboration was to boost the restaurant business and reach a larger audience.

NRAI says that the Federation of Hotel & Restaurant Association of India (FHRAI), the apex body of the Hotel Industry in India, comprising of Hotel & Restaurant Association of North India (HRANI), Hotel & Restaurant Association of Western India (HRAWI), South India Hotels & Restaurants Association (SIHRA) & HRAEI, has also extended its wholehearted support to the #Logout movement initiated by NRAI in August 2019. Along with FHRAI, several other associations such as Thane Hotel Association, Pune Restaurants & Hotel Association (PRAHA), NHRA, Vadodara Food Entrepreneurs (VFE) have also unitedly joined the #Logout movement, says the association.

Responding to the campaign launched by NRAI, Deepinder Goyal, founder and chief executive of Zomato had tweeted, “What’s good for restaurants is good for Zomato. What’s good for consumers is good for Zomato. Finding the right balance and product-market fit is the restaurant industry’s problem (and that includes us).”

Regional Manager of #BEiR café in Bangalore said, “We are planning soon to stop collaborating with Zomato as it is no more a profit for us. They are providing deep discounts which we as a restaurant cannot afford. There is no difference in our business with or without Zomato, so will not collaborate with them anymore.”

“Since there is a lot of competition among the food delivery apps, they are providing these huge discounts. But we, in any case have to provide quality food,” he added.

Yudister, Marketing Manager of a café at Church Street said, “Zomato and Swiggy are no more a source of profit to us. The huge discounts provided by them are causing us losses. They take a margin of 25 percent from us and end up providing 50 percent discounts to their users.”

Food-lovers though, are quite impressed by the applications. Udisha Mathur who frequently order food online said, “In the past, I had to pay large bills at the restaurants but after the introduction of online food delivery I can enjoy my favorite meal at discounted price. These apps are bliss to food-lovers who can now order food from good restaurants at a very low price.”

Experts say that finding balance between the two is the solution to the problem. Chitra Chaudhary, Assistant Professor of Economics said, “It is not only the restaurants but everybody is getting affected by the online platforms. Because of the online business, the retailers all over the country are facing problems. The best solution to this is finding a balance where both the parties are benefitted and the customers can also enjoy the perks of digitalization.”