#Logout campaign: Truce between restaurant owners and food aggregators

A potential truce between restaurant owners and food aggregators such as Zomato, Swiggy et al may soon happen with the latter agreeing on reducing deep discounts. The deal may, however, not turn out to be the best for consumers and in turn, could affect volumes of food aggregators in the long run.

The Logout campaign started on August 15, after which 1600+ restaurants pull out from Zomato and other foodservice apps claiming Zomato Gold, Infinity Dining and other offers for cutting down on their businesses.

The ongoing discount battle between the food tech giants and restaurants has majorly hit Zomato, caused resistance for its programs such as Zomato Gold and Infinity Dining.

Speaking of these services under Zomato Gold, customers are offered 1+1 on food and 2+2 on drinks, whereas, in Infinity Dining one can ‘order anything and everything’ they want from the entire menu at a fixed per person price rate. A great deal for the customers! However, it isn’t a cakewalk for the restaurants to gain profit out these.

Also read: Zorawar Kalra: A restaurant is losing money every time it serves a customer on a food aggregator

Noida-based, table reservation program Dineout also offers ‘buy-one-get-one’ on the buffet, food and drinks, under its membership program called Gourmet Passport.

The Federation of Hotel & Restaurant Associations of India (FHRAI), also supported the #Logout movement. They even wrote a letter to the food aggregators to review their schemes and requested to engage in a fruitful dialogue to arrive at a win-win outcome for all.

"We are absolutely in favour of doing business, a business that is a win-win for everyone involved," FHRAI vice president Gurbaxish Singh Kohli said.

Zorawar Kalra, the founder and managing director of Massive Restaurants Pvt Ltd, running nine restaurants across five brands, including Masala Library and Farzi Café told CNBC-TV18, “If the margin is 15 percent how can I pay a 25 percent discount? It just means that I am losing out on 10 percent on every dish that I serve you.”

The former has also judged Master Chef India and while sharing his opinion he said, “I believe that we can serve better if these platforms go away because consumers love eating out and it’s always been a source of entertainment for Indians as we spend the highest amount of disposable income in eating out than any other form of entertainment.”

Besides, “Zomato sells the subscriptions and whichever customers come to the restaurant the entire discount has to be borne by the restaurant,” he later added.

To tackle the situation and get the associated restaurants back on the board, Zomato founder Deepinder Goyal tweeted, “I would also want to urge the restaurant industry to proactively look for ways to reduce operating costs, so that eating out becomes more affordable for consumers — our only objective here is to drive the growth of the restaurant industry.”

After a two-day meeting with the National Restaurants Association of India (NRAI), the food tech organisations agreed to rejig their features by cutting down the deep discounts (up to 60 percent) and bring relief to the restaurant owners.

Riyaaz Amlani, CEO and MD of Impresario Entertainment and Hospitality Pvt Ltd, has 48 restaurants across 15 cities under the umbrella brands such as Social, Mocha, Smoke House Deli, Salt Water Café and many more, told CNBC-TV18 that initially Zomato Gold was promised to be exclusive. However, with time they added a large number of restaurants to it in a way that the restaurants which aren’t the part of the scheme will end up with decreased footfall.

CNBC-TV18 asked Riyaaz Amlani, who is also the former NRAI president and one of the active member heading the movement, where does this whole issue leave the customer? He told, “There is no need for a middleman who only wants a piece of the action from both the customer and the restaurant.”

On asking about the scope for policy intervention or things restaurant owners would like the government to do, he told, “We have already approached the government through Piyush Goyal, the minister of Railways and Commerce with the issue raised by the NRAI. And are hoping to hear back from them soon positively.”

However, it is a tough situation for the customers as well, who have subscribed to these memberships for big discounts, table reservation and other great offers.

A Zomato Gold user Mudit Pareek spill beans on the current scenario, “It’s sad that a large number of restaurants have logged out from Zomato. I have paid for its annual subscription yet unable to avail it in my favourite restaurants, since, they no more cater to these services."