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For logged out eateries, discount’s on the house



NEW DELHI: Jamie’s Italian restaurant in south Delhi’s Ambience Mall, otherwise packed to the rafters, wore a deserted look on Sunday afternoon. The absence of customers was probably because the restaurant no longer accepts Zomato Gold, the aggregator-driven discount programme. However, Jamie’s has started signing up customers for its own rewards programme.

After the clash with aggregator apps Zomato, EazyDiner and Dineout last month, some restaurants are wresting control of loyalty programmes and discounts, starting or reinforcing their own schemes, and reeling in customers with offers on lean days.

Chili’s Grill & Bar has started offering free dessert. The Irish House has a buy-one-get-one free offer on alcohol before 8 pm on weekdays. Barbecue Nation has a special Monday and Tuesday unlimited food menu.

“Nobody wants to lose a customer. Discounting always existed but we are moving it back inhouse. We are taking the power back,” said Anurag Katriar, executive director of deGustibus Hospitality that runs Indigo Deli.

According to an F&B consultant and restaurant owner, spending a limited amount daily to bring in a crowd is not the issue. But if the cost of discounts is 10 times what the restaurant budgeted, it doesn’t make economic sense.

One of the peeves against Zomato was that it wasn’t sharing the burden with restaurants.

“We are giving discounts at our Goa and Chennai restaurants where we work with liquor partners who take half the hit as a promotional cost,” said Bengaluru-based ThinkTanc’s cofounder Amit Roy.

“Principally, if your plan is to acquire customers, aggregators are great. But for retention or loyalty, restaurants need to have smaller inhouse discounts,” said Mumbai-based Karan Tanna, founder of Yellow Tie Hospitality, which operates restaurants like Bombay Blue. Loyalty-linked discounts should stay between 5% and 15% to ensure that they don’t impinge on a restaurant’s margins, Tanna said. Such discounts are then limited in duration and don’t necessarily kick in at peak hours. Dynamic prices are an effective way to counter lean times.

“It works across various sectors including hospitality. It provides incentives to customers looking at pocket-friendly opportunities,” said Rahul Singh, president of the National Restaurant Association of India.

Gauri Devidayal, cofounder of The Table, a fine-dining restaurant in Mumbai that was never a part of the manic discounting, said it doesn’t make sense to run restaurants only for those who come in for discounts.

“This may be a good chance for the industry to reduce its menu costs, in case they feel that they’re overpriced,” she said.

Although each restaurant has its own economics based on footfalls and location, if the mechanics of discounting are exactly the same as that of 1+1 aggregator schemes, they wouldn’t end up saving anything. On the other hand, if they were to slightly tweak the offering, even something as basic as an offer during 6-8 pm on weekdays, they would be better off.

“Short-burst discounts are done purely to get some aspirational guests who weren’t otherwise going to try your restaurant. For instance, we’d rather give one free sangria, a product we make well, instead of a 1+1 on food and drinks. Discounts will continue to happen, but I see it more as a reclaiming power,” said Anka Sharma, cofounder of upscale restaurant Uno Más in Mumbai.

ET found that New Delhi and Mumbai were the most affected by the “logout” campaign that restaurants initiated against Zomato Gold. The aggregator is issuing pro-rata refunds to users who do not agree with the renewed fair-usage policies, a company spokesperson told ET.

Although over 2,500 restaurants have refused to allow aggregators to give 1+1 schemes on their behalf, there are still some in the low-bill value space that offer such discounts to stay afloat. Restaurateurs say they can only afford discounts of 5% to 15% but on a discretionary basis.

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