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Posted at: Aug 23, 2019, 7:47 AM; last updated: Aug 23, 2019, 7:47 AM (IST)

Don’t (dis)count on this

While apps have been great for creating new clients for customers, deep discounting practice has been destructive. #Logout has unified restaurant bodies and forced food aggregators to take notice...


Muskan Oberoi is a Zomato Gold user, and, over the last few days, feeling the pinch. The discounts seem to have dropped, not many BOGO (Buy One, Get One Free) out there and #Logout trending! Result: food aggregators, restaurant bodies and customers, all equally at sea.

Online apps have changed eating out habits lately; only the very apps that fetched business and launched many eateries into business are also becoming the cause of their doom.

Unhealthy trend

#Logout has made food aggregators sit up and take notice. While Roll Xpress founder Amit Chugh gives due credit to apps for creating a new segment of clients, in the longer run, the deep discounting practice has proven destructive. “As steep as 50 per cent discount would either put the eateries out of business or force them to compromise on quality,” he says.

With 23 outlets and an established customer base, Roll Xpress decided to do away with discounting rather early. “A small-time restaurateur without much funding to put in publicity alone is no match for food aggregators with enormous funds,” says Chugh, but he sees this tussle only as temporary.

Guntash from Hash Guys admits that while apps bring more business, they also eat significantly into the profits. “For a takeaway joint like ours, we can price an item up to Rs 200 or Rs 250. With apps randomly hiking their tie-up fee as high as 28 per cent, it has spelled doom for many tricity businesses.”

“Individually, no one could have challenged the food aggregators, but now that national bodies have come together to negotiate, I hope the arm-twisting would seize,” he adds.

Paying for quality

Apps like Swiggy, Uber Eats, Magicpin, EazyDiner have brought a huge spending shift. Now, #logout campaign has made them rethink their strategies and offer “a level playing field for everyone” as Deepinder Goyal, founder Zomato tweeted on Thursday

Karanjeet Singh, MD, Cottage and Virgin Courtyard, did not give in to the app world to begin with. “Discounts are not our policy. For quality food and great service, one needs to pay little extra. As long as one is living up to one’s promise, clients don’t mind that,” he says, not ready to compromise these standards. “Deep discounts would lead to cost-cutting somewhere, which we have strictly refrained from,” says Chef Krishan Hari.


No free lunches

“There are no free lunches,” says Manmohan Singh Kohli, chairman, Hotel and Restaurant Association of Chandigarh (HRAC). As a frontrunner in hospitality industry, he’s been advising not to give in to the app lure; he insists that it’s not only hoteliers or restaurateurs who are at the loss, but the industry’s entire workforce. “Now the issue has been taken, the point of contention is not just deep discounting, but also oppressive contracts, data masking and unethical practices.” While it worked for everyone’s benefit as long as these apps restricted to delivery logistics, trying to step into production and unethically controlling market is not fair.

Let everyone win

“An aggregator’s most important job is to level the playing field for everyone......We stand by the changes we are making to gold, they are in supreme interest of our restaurant partners and valued members – it helps everyone win.”—Deepinder Goyal, Founder Zomato


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