Food apps can't set discounts: Restaurants

Restaurants are willing to pay food aggregators for reservation and delivery but won’t let them dictate discounts, the head of a national body of restaurants said on Monday, hardening its stance on the ongoing move by eating joints logging out of platforms operated by apps.

Challenging deep discounting practices of online food aggregators, the National Restaurant Association of India (NRAI) last week claimed 1,200 restaurants had delisted themselves from online platforms, including Zomato, Eazydiner and Nearbuyunder the #Logout campaign. On Monday, several restaurant owners put the number even higher at 2,200.

“We are willing to pay restaurant apps for the reservation and delivery and be on their platform. But we can’t let them decide discounts for us. People who used these apps didn’t know that apps were charging both the restaurant and customers and didn’t share any of the discounts. We would have our own loyalty program for our customers,” said Rahul Singh, president at NRAI and CEO of Beer Cafe.

Zomato said only 65 restaurants have logged out from its platform, which is 1% of the restaurant partner base of its premium Gold service.

Major chains that have logged off include First Fiddle restaurants with outlets such as Plum by Bent Chair, Dragon Fly and Lord of the Drinks, Olive Group's restaurants Sodabottleopenerwala and Olive, Beer Cafe, Impresario with outlets Social and Smoke House and Lite Bite Food that operates Punjab Grill and Asia 7.

“From being a discovery app, these became discount apps,” said Rohit Aggarwal, director at Lite Bite Food.

The standoff between restaurant owners and online food aggregators was triggered by Zomato’s “Infinity Dining” plan which allowed its “Gold” subscribers to opt for unlimited items at its partner restaurants.

“Zomato Gold was to be an exclusive offer extended to limited number of restaurant partners. Zomato extended it to a million subscribers and got every restaurant on board,” said Riyaaz Amlani, CEO of Impresario Entertainment and Hospitality.

Zomato founder & CEO Deepinder Goyal acknowledged the restaurant industry’s concerns.

“Zomato Gold has been a major hit, but we understand that bargain hunters have also joined Zomato Gold and they are hurting some segments of the restaurant industry very badly. This is a wake up call that we need to do 100x more for our restaurant partners than we have done before,” Goyal said on Twitter.

Online food apps, including Dineout in which Times Internet, a part of the Times Group that publishes TOI is an investor, said they are closely working with restaurants and the NRAI to build a more viable consumer facing platform that will address the restaurant’s technological needs and solve it with the multiple B2B modules to optimise revenues and costs.

“The major issue is of deep discounting and permission to use it any number of times. Even our premium offering of Gourmet Passport limits the redemptions to only three coupons per restaurant,” said Ankit Mehrotra, co-founder & CEO, Dineout.

Source:- https://retail.economictimes.indiatimes.com/news/food-entertainment/food-services/food-apps-cant-set-discounts-restaurants/70747235