Discount row: Food aggregators, restaurants kiss and make up

The NRAI stressed that there is a need to detox the restaurant-customer ecosystem from the addiction to deep discounts that has crippled the industry.

Published: 21st August 2019 09:53 AM  |   Last Updated: 21st August 2019 09:53 AM   |  A+A-


For representational purposes (File Photo | AFP)

Express News Service

NEW DELHI: Easing the ongoing tussle between food aggregators and restaurant owners, the National Restaurant Association of India (NRAI) on Tuesday said that aggregators, especially Zomato, have agreed to redesign their schemes to rein in deep discounts offered to customers. “Discount is a privilege and not a right,” the association said.

“While one aggregator gave 1+1, the other had to adopt a 50 per cent discount scheme in order to stay relevant. And what hurts the most is that these deep discounts are funded by the restaurant industry and not the aggregators. Moreover, as opposed to the general perception, restaurants do not get any share of the proceeds that aggregators generate from guests as subscription fees,” NRAI president Rahul Singh said. 

In the last few days, more than 1,200 restaurants delisted themselves from platforms such as EazyDiner (Prime), Zomato Gold, Dineout and Nearbuy as part of an NRAI-led campaign called #LogOut. This happened in spite of the discounts increasing footfalls and sales for restaurants, even as the online platforms claimed the discounts. 

Responding to NRAI’s agitation, Zomato’s founder Deepinder Goyal on Saturday requested restaurant owners to stop the logout campaign.

He even said they are ready to make modifications to Zomato Gold, which will result in a win-win situation for restaurants and consumers, while admitting that the company had made mistakes and “things did not go as planned”.

The NRAI stressed that there is a need to detox the restaurant-customer ecosystem from the addiction to deep discounts that has crippled the industry.

“Discounting works well in the retail space, because brands can limit supply (or make it look like supply is limited), and therefore create a sense of urgency in the eyes of the consumer.  Unlike retail, where end of season sale is to clear leftovers, a restaurant doesn’t serve leftovers at a discounted price. It’s all prepared fresh and made to order,” Singh said. 

The reconciliation between the two parties is expected to impact the third major party — the consumers, who have become accustomed to discounts.

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