Due to steep discounts, 900 restaurants will be removed from Swiggy Dineout

The fight between restaurants and the foodtech platforms Zomato and Swiggy has moved to dine-in after the delivery of food. According to sources in the restaurant business, approximately 900 restaurant locations have either delisted from Swiggy Dineout or have given delisting notices to the service. They have also reportedly refrained from signing up for Zomato Pay, which has not yet been made available nationwide.

Indigo Hospitality, which owns Indigo Deli, Impresario Entertainment and Hospitality, which owns brands like Social and Smoke House Deli, Mamagoto, Wow Momos, and Chaayos, among others, are among the eateries that have been removed from Swiggy Dineout's list of participating restaurants.

Restaurants complain that the forced discounts they must provide when patrons pay through apps like Dineout or Zomato Pay will harm their profitability and are not long-term viable, particularly at a time when businesses are still struggling to recover from two years of COVID-related restrictions and high inflation rates.

However, according to a statement from Swiggy, only a small number of restaurant partners have expressed a desire to leave the platform. The statement also stated that restaurant partners on Swiggy Dineout are entirely free to choose the amount of discount they wish to provide to customers through their listing on the app.

Swiggy Dineout works with more than 15,000 restaurant partners on the platform across more than 20 locations, and we constantly communicate with them to enhance our services and make this cooperation profitable for both parties. According to a Swiggy spokesman, restaurant partners on Swiggy Dineout are completely free to choose the amount of discount they want to provide to customers through their listing on the app.

Only a small number of restaurant partners have expressed a desire to delist from the platform, despite the fact that thousands of partners continue to sign up with us each month and list on Swiggy Dineout. We keep in touch with our restaurant partners and NRAI officials to go over our options," he continued.

Additionally, according to sources, there were just over 20 brands that logged out, and each company has many outlets, making the delisting appear to be taking place across a wider range of platforms, such as Eazydiner. The number of outlets that log out of Dineout is expected to surpass 1000 by next week, according to NRAI.

"We make it abundantly apparent that we abhor deep discounting. As far as we can tell, Eazydiner is more of a platform for reservations that provides payback that is sponsored by credit card companies rather than eateries, according to Sagar Daryani, vice president of NRAI.

Our attention is presently on Zomato Pay and Swiggy Dineout because we are concerned that these platforms will cause the dine-in industry, which is already dealing with narrow margins following Covid and food inflation as a result of the recent battle, to become heavily focused on discounts and deals. We haven't yet recommended our members to log out of EazyDiner, but if we notice deep discounts there as well, we will do so," he continued.

Weeks after the National Restaurant Association of India issued a warning to eateries regarding Swiggy Dineout and Zomato Pay, restaurants have stopped using the dine-in options. At the time, it was stated that these schemes would make eating in unaffordably inexpensive.

Restaurants should carefully review the terms and circumstances before deciding whether to participate in these initiatives, according to the NRAI's warning. It continued, "This is a huge problem because both have hit peaks in terms of what they can charge for delivery orders (now in the range of 25-30 percent), making efforts to spread the pie the only path forward."

Following its recent acquisition of Dineout, Swiggy entered the dine-in market, whereas Zomato had previously offered programmes like Zomato Gold & Pro that let users take advantage of discounts when dining in at restaurants. The Zomato Pay service, which enables its restaurant partners to "give a Discount to the Customers paying the Bill Value using Zomato Pay," is currently being rolled out.

Zomato and Swiggy Dineout have been working with NRAI to modify their dine-in options in a way that benefits both the platforms and the businesses. The fraternity is more eager to have a lead platform for discovery without significant discounts.

Daryani continued, "Despite having just settled a few difficulties for the advantage of restaurants with the aggregator over food delivery, it is still in a standstill with Zomato over Zomato Pay, despite having just received a proposal from Swiggy Dineout this week, which NRAI is presently considering.

In response to concerns over commission, data masking, and deep discounts, the NRAI and other restaurant organisations launched the "#Logout" campaign in 2019. This pushed businesses to log off of Zomato and focus instead on developing direct delivery.

In 2021, NRAI also filed a complaint with the Competition Commission of India (CCI) requesting a probe into alleged anti-competitive actions by Swiggy and Zomato.