Home / Companies / News /  What does the Zomato vs restaurants row mean for customers?

More than 1,200 restaurants have reportedly delisted themselves from food platforms such as Zomato in a National Restaurant Association of India (NRAI)-led campaign called #LogOut, to protest against the “unsustainable" deep discounts they offer. While platforms claim the discounts help increase footfalls and sales for restaurants, restaurant owners say their businesses are suffering for it.

While the official number of delisted restaurants, according to Zomato, is only 65, which is 1% of the restaurant partner base of Zomato Gold, according to Brijesh Pande, chief executive officer of Mumbai-based restaurant D51 Bar and Kitchen, and member of NRAI, the number is above 450 in Mumbai alone.

The row

The delistings followed Zomato’s recent introduction of a plan called “Infinity Dining" for subscribers of Zomato Gold, which allows them to order anything from the menu of partner restaurants at a relatively nominal price, for a limited period of time. In a post on the Zomato blog, Gaurav Gupta, chief operating officer and co-founder of the company, wrote, “For the same price that users would spend on a typical two-course meal, they can now order anything and everything you want from the entire menu (yes, the entire menu!) with unlimited servings of their favourite dishes."

While this bodes well for customers, especially deal hunters, it’s a dampener for restaurant owners. “Zomato has been giving away unreasonably deep discounts and restaurants have been bleeding as a result. Discounts like ‘Infinity’ result in food wastage and customers trying to make the most of the offer end up ruining the dining experience. Action had to be taken against it," said Pande.

Zomato CEO Deepinder Goyal, in a tweet, acknowledged the problem. “Zomato Gold has been a major hit, but we understand that bargain hunters have also joined Zomato Gold and they are hurting some segments of the restaurant industry very badly. I am sad that young entrepreneurs (much like me) in the restaurant industry are feeling the pressure to such an extent that they had to launch such a campaign. We set out to create a company which can create a massive impact on consumers, as well as business owners. Somewhere, we have made mistakes and things haven’t gone as planned. This is a wake-up call that we need to do 100x more for our restaurant partners than we have done before," he tweeted.

Zomato’s spokesperson called the tweet the company’s official response. Mint’s email to Zomato did not elicit any reply till the filing of this report.

Customers’ plight

The aggregator, however, did not address what customers can expect in the wake of the delistings.

The delistings can be painful for customers, since many have become accustomed to deep discounts. Many customers reacted to reports about the #LogOut campaign on the social media with annoyance, stating that they believed restaurants inflated prices to begin with and did not want customers to save on orders. The delistings also mean fewer options for customers, especially those who have paid for a Zomato Gold or Infinity pass.

Till the dissenting restaurants and platforms reach an agreement, customers will have to make do with what is still on offer. While Zomato Gold can still be availed of at the remaining partner restaurants, according to users, Zomato’s landing page has been stripped of many of the offers it usually lists. If you have recently bought a Zomato Gold or Infinity pass, this might mean fewer discounts for you for the time being. If you are planning to buy one of these deals, it might be wise to wait till the dust settles to make your purchase.

Also read: Aggregators to change features after restaurants call for end to freebies

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