Cap discounts at 10-15%, restaurateurs tell online food aggregators

Restaurateurs on Monday asked online food discovery players to cap discounts at 10-15 per cent. This was discussed at a meeting between the National Restaurants Association of India (NRAI) and online food aggregators including EazyDiner, NearBuy and DineOut.

So far, over 2,500 restaurants have logged out of online delivery platforms, according to sources. The NRAI is set to meet Zomato and MagicPin on Tuesday. An industry insider told BusinessLine: “We all agreed that discounting is not the way forward. There was an agreement that the industry cannot grow on the basis of discounts.”

The NRAI has firmly stated that mindless discounting is not helping restaurateurs and thus, it isn’t helping the business grow.“Both parties have agreed that there will be a cap; however, there was a debate on the quantum of the cap. The NRAI has said that logouts will continue as restaurants are not okay with discounts of more than 10-15 per cent. If the restaurateurs don’t grow, the industry doesn’t grow,” the person added.

On August 15, 300 restaurateurs signed up to the ‘LogOut’ campaign against online food discovery platforms such as Zomato, NearBuy, MagicPin and EazyDiner, challenging their deep-discounting practices. By Sunday night, over 1,500 restaurants had joined the campaign.

“As there has been no concrete agreement, and the modalities are yet to be discussed, the logout is likely to continue for almost a week or till an the time there is no agreement in reached,” the person said.

“Both sides want the issues to be resolved. We are hoping to come to an agreement in the next few days,” said Sachin Pabreja, co founder of EazyDiner.

NRAI President Rahul Singh had explained that rampant discounting is one of the worst things aggregators can do because they are conditioning customers into de-valuing the product. An executive representing an online food discovery firm said the meetings were fruitful. “We want to resolve the issue, and we want to have a discussion. There are a few meetings that are scheduled throughout the week,” the executive said.

Zomato founder Deepinder Goyal, in a series of tweets on Saturday, said: “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.”