Platforms For Food Delivery Swiggy And Zomato Discounts Dry Up as Restaurants Shut

Platforms For Food Delivery Swiggy And Zomato Discounts Dry Up as Restaurants Shut

Discounts on Swiggy and Zomato have dried up amid a sharp increase in demand for food deliveries across states, even as strict controls to contain the third wave of the Covid-19 pandemic have forced many restaurants to close their doors.

“With restaurants shut down or operating under severe curbs, the aggregators too rework their business models and try to maximise their profitability,” said AD Singh, managing director of Olive Group, which runs marquee restaurant brands such as Olive Bar and Kitchen, SodaBottleOpenerWala and The Grammar Room.

The heavy discounting offered by the two leading food ordering platforms has been a source of contention between them and the Rs 4.2 lakh crore restaurant industry, which has been operating under severe cost pressure since the coronavirus outbreak and the first lockdown.

"Delivery has now become the only mode of survival," said Sagar Daryani, CEO of Wow! Momo. "Previously, the aggregators pushed delivery habit creation, but now that the habit has been established, they, too, have realised that deep discounting is not the way forward." Daryani is also the vice president of the National Restaurant Association of India (NRAI).

"As and when the situation normalises and restaurants reopen," said the CEO of a premium Delhi-based restaurant chain, "we expect the heavy discounts by aggregators to return."

According to a Zomato executive who spoke on the condition of anonymity, the current decline in discounting is cyclical following heavy Christmas and New Year discounts.

The development comes amid mass shutdown of restaurants and pubs in some cities, particularly Delhi where the Delhi Disaster Management Authority (DDMA) on Monday ordered restaurants and bars to stop dine-in services, allowing only delivery services and takeaways. “The new guidelines, which prohibits dining completely and allows only deliveries, is completely unsustainable,” NRAI president Kabir Suri said.