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Restaurants’ protest against massive discounts catches on with #Logout



On August 15, the National Restaurant Association of India (NRAI) launched a campaign #Logout against the heavy discounts offered by online food platforms to their subscribers. This, they believe, is an unsustainable business model and are hoping to reach out to food aggregators to take some corrective measures against imbalance caused by massive discount programmes being offered to subscribers.

Deep discounts are hampering the fundamentals of trade, say restaurateurs

Anurag Katriar, director and CEO of a hospitality brand and managing committee member and Mumbai chapter head of NRAI, shares, “The response to the #Logout campaign has been spontaneous across the restaurant fraternity. Every member restaurant has decided to log out off these aggregator-driven reservation platforms that are based purely on massive discounts and commissions. It’s being spearheaded by the NRAI, but the support has also been pouring from restaurants, who are not even members of the association. We have been compelled to take this step because it is a grossly unfair business structure, which is hampering the fundamentals of the trade. It is fundamentally wrong and unfair because the aggregator collects money from both parties — restaurants and consumers, but the discounts are funded solely by the restaurants. We had no option but to resort to #Logout to protest this skewed equation.” The situation, he says, was was spurred by the “unbridled greed of the aggregators”. “There were promotions and discounts for the consumers earlier too, but the aggregators have distorted the market to an extent where the survival of the restaurant business is at stake. Now that most aggregators have agreed for a dialogue, we hope to make a breakthrough soon to create an atmosphere for a fair co-existence.”

Restaurateur Riyaaz Amlani goes on to share, “The food aggregators claim they are helping business by giving heavy discounts. However, this is not a sustainable model. We have tried to engage with them, but have been unsuccessful in doing so. This has led to a lot of anger and resentment that has now spiralled into a nation-wide movement. We entered this model on the understanding that we would be partners in business, which is not the case as they have been ignoring our concerns and are not willing to hear us out. At the moment, we are not entertaining any discounts offered by these food platforms. We will be meeting them on Monday, and if nothing comes off it, we will be forced to log out.”

Brijesh Pande, another member of NRAI, who has already delisted, shares, “Food aggregators are giving away irrational discounts at their will and getting restaurants to come on board, portraying that the footfall will increase by way of discounting. Some of them take a monthly or yearly fee from the customers and allow them a database of 4,000 plus restaurants in Mumbai at their disposal. Restaurants end up discounting their product. In fact, every individual restaurateur could do the same at their own premises too.”

‘Cannot afford to give discounts at peak hours’

Discount programmes like the ones offered by online food platforms reduces the profit margins and leads to heavy losses for restaurant owners. This has forced many of them to discontinue their association with food aggregators. Says Meldan D’Cunha, owner of a suburban eatery, “When we signed up, we were told that guests would come during all the slots. There are different discounted rates at different time slots, but hardly anyone is interested in the slower non-peak hours. We cannot afford to give discounts at peak hours only. Plus, payments take time, so I opted out of these discount programmes.”

AHAR May consider lending support to NRAI

NRAI is not alone in this fight. Associations like Indian Hotel and Restaurant Association (AHAR) have also been battling these trade practices for a while now. Santosh Shetty, president of AHAR, says, “We have been fighting against the uncalled-for business practices of food aggregators for a long time now, and may also consider supporting the NRAI if it is also in the best interest of our members.”

Food aggregators surprised to see a campaign of ‘this nature’

Restaurants in several cities have reportedly started delisting from restaurant reservation aggregators offering deep discounts. This and the silent protest in the form of #Logout by restaurants has clearly taken the aggregators by surprise. Shares a spokesperson for a food aggregator, “The evolution of our dine-out offerings has always been driven by the objective of driving growth of the restaurant industry. As Indians, we do not dine-out as much as our global peers and our programme was launched to push the dining-out experience. We, as a platform, are as much in it as the restaurants, who saw merit in this solution and signed up to change consumer behaviour towards ‘eating-out’. The initial response and its growth in the past 18 months are a testament to its success. Having said that, we have constantly been in touch with the restaurant industry to discuss their feedback and address any issues they may be facing as a part of our offerings. It was extremely surprising for us to see a campaign of this nature being launched without the restaurant committee even calling for any discussion regarding the same. We have still not received any invitation for a discussion on this topic, but we remain open to any conversations to resolve ongoing issues. As of now, less than one per cent of the restaurant partner base of gold has supported the challenges raised by the NRAI earlier this week. We are actively engaging with our restaurant partners to discuss and resolve any issues that they might have and will continue to sign up new restaurants to bring more choice to users.”

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