Logout campaign: Online food platforms agree to redesign schemes to check deep discounts: NRAI
Launching a logging out campaign in protest against dine-in schemes, around 1,200 restaurants in major cities had reportedly delisted from the dine-in programmes of food aggregators.
NRAI stressed the need to detox restaurant-customer ecosystem from addiction of deep discounts
The association was in talks with online food delivery platforms to resolve confrontation over discounting schemes
What hurts the most is that these deep-discounts are funded by the restaurant industry and not the aggregators
New Delhi: The National Restaurant Association of India (NRAI) on Tuesday said food aggregators have agreed to redesign their schemes to rein in deep discounts offered to customers and asserted that discount is a privilege, not a right.
The NRAI stressed the need to "detox" the restaurant-customer ecosystem from the addiction of deep discounts that have crippled the industry.
The association, which represents leading restaurant chains, independent eateries, bars and diners, was in talks with online food delivery platforms like Zomato and Swiggy for the past two days to resolve the confrontation over discounting schemes, dine-in programmes and table reservation schemes.
Launching a logging out campaign in protest against dine-in schemes, around 1,200 restaurants in major cities had reportedly delisted from the dine-in programmes of food aggregators, saying that deep discounting offered by the platforms was unsustainable and was hurting their business.
"Over the past two days, NRAI held extensive meetings with all restaurant aggregators and we were bemused to learn that the aggregators were promoting deep-discounts to stay competitive amongst each other," the association said in a statement.
What hurts the most is that these deep-discounts are funded by the restaurant industry and not the aggregators, it added.
"Moreover, as opposed to general perception, restaurants do not get any share of the proceeds that aggregators generate from guests as subscription fees," the statement said.
NRAI and aggregators were in agreement that technology is the backbone to enable restaurant discovery and a friction-less experience to the guests. However, guests should not be lured by devaluing the core product at a restaurant, it added.
"Therefore it was decided, that all aggregators will rejig their features which will allow the restaurant-customer ecosystem to detox from the addiction of deep-discounts that has crippled the industry," the statement said.
The idea of scoring a discount should make guests feel special and not give them a sense of beating the system. Discount is a privilege and not a right, it added.
Discounting works well in the retail space, because brands can limit supply or at least make it look like supply is limited, and therefore create a sense of urgency in the eyes of the consumer, the statement said.
"Unlike retail, where the 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," NRAI said, highlighting the difference between the two sectors.
When asked about the future steps that the association plans to take on the issue, NRAI said: "When we hear back from all the aggregators on the changes/tweaks they will do, we will review if the objective of curbing deep discounting has been achieved."
Amid an escalating face-off between restaurants and aggregators, online food ordering platform Zomato on Thursday took a dig a restaurant association head Rahul Singh saying he was offering discounts at his own The Beer Cafe chain of outlets, proving that he was not against such policies
Food delivery platform Zomato, which reportedly is facing delivery executives' protest in Mumbai and Bengaluru, on Tuesday said it is working to "resume" services in the affected areas
Zomato has lost 65 restaurants, which is 1 percent of the restaurant partner base of its 'Zomato Gold' programme.