After food delivery, the Logout battle between restaurants and foodtech platforms Swiggy and Zomato has come to dine-in. Sources in the restaurant industry have said that nearly 900 restaurant outlets have either delisted or have sent delisting notices to Swiggy Dineout, while also refraining from signing up for Zomato Pay, which is yet to be rollout out nationally.
Restaurants that have delisted from Swiggy Dineout include Indigo Hospitality which runs Indigo Deli, Impresario Entertainment and Hospitality that runs brands like Social and Smoke House Deli, Mamagoto, Wow Momos, and Chaayos, among others.
The grouse of restaurants is that discounts that they’re forced to offer when a customer pays at a restaurant through apps like Dineout or
Zomato Pay will hurt their profitability and is not sustainable in the long run, especially at a time when restaurants are limping back after two years of COVID-related restrictions and high inflationary environment.
Swiggy, however, said in a statement that only a handful of restaurant partners have expressed their desire to delist from the platform, further adding that Restaurant partners on Swiggy Dineout have complete liberty to decide on how much discount they wish to offer to customers through their listing on the app.
“Swiggy Dineout works with over 15,000 restaurant partners on the platform in over 20 cities and continuously engages with them to improve our offering and make this partnership viable for everyone. Restaurant partners on Swiggy Dineout have complete liberty to decide on how much discount they wish to offer to customers through their listing on the app,” a Swiggy spokesperson informed.
Thousands of partners continue to join us each month and list on Swiggy Dineout and only a handful of restaurant partners have expressed their desire to delist from the platform. We continue to engage with restaurant partners and NRAI representatives to revisit their choices,” he added.
Further, sources say that the number of brands that logged out is just over 20, with each brand having several outlets, making the delisting appear at a much larger scale than it is and that the delisting is happening across platforms including the likes of Eazydiner. Meanwhile,
NRAI has said that the number of outlets to logout of Dineout is likely to cross 1000 by next week.
“We are very clear that we’re completely against deep discounting. From what we understand currently, Eazydiner is more of a reservation platform that offers cashback that are sponsored by credit card companies and not by restaurants,”
Sagar Daryani, vice president, NRAI said.
Our focus is currently on Zomato Pay and Swiggy Dineout as we fear that these platforms are going to make the dine-in business largely discount & deal centric for the fraternity which is anyways struggling with thin margins post-Covid & food inflation on account of the recent war. We haven’t advised our members to log off from
EazyDiner yet, but if we see deep discounting happening there too, we will logout from there too,” he added.
The logout by restaurants on the dine-in offerings comes weeks after the National Restaurant Association of India issued an advisory to restaurants over Swiggy Dineout and Zomato Pay. It said at the time that these programs will make dine-in unsustainably cheaper.
In its advisory, NRAI said restaurants need to inspect the terms and conditions thoroughly and then make an informed decision on their participation in these programs. “This is a big deal because both have reached peaks in terms of how much they can charge for delivery orders (currently in the range of 25-30 percent) – making efforts to widen the pie the only way forward,” it added.
Swiggy forayed into the dine-in segment after its recent acquisition of Dineout, while Zomato has been in the space with its previous programs like Zomato Gold & Pro that allowed consumers to avail offers while dining in at restaurants. Zomato is now rolling out Zomato pay that allows its restaurant partners to “extend a Discount to the Customers paying the Bill Value through Zomato Pay”.
NRAI had been engaging with Swiggy Dineout and Zomato over tweaking models of their dine-in offerings to one that is beneficial to both restaurants and the platforms. The fraternity is keener to have a discovery lead platform without deep discounting.
Daryani added that while it has just received a proposal from Swiggy Dineout this week which NRAI is currently reviewing, it is still in a deadlock with Zomato over Zomato Pay despite having successfully resolved a few issues for the benefit of restaurants with the aggregator over food delivery in the recent past.
NRAI and other restaurant bodies in 2019 launched a ‘#Logout’ campaign where it encouraged restaurants to log out of Zomato over issues of commission, data masking and deep discounting and work on building direct delivery.
