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HomeOpinion & ReportingRestaurants on Swiggy, Zomato are charging 10% more than in-store pricing: Report

Restaurants on Swiggy, Zomato are charging 10% more than in-store pricing: Report

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Restaurants listed on meal delivery services like Zomato and Swiggy have started to charge customers on average about 10% more than the pricing stated on their menus in-store.

According to a Jefferies research cited by Mint, the restaurants are accusing the higher commissions and promotional fees for the price increase.

According to the report, food tech giants Zomato and Swiggy had to increase take-out prices as a result of a stronger focus on profitability. In the end, it prompted restaurants to charge differently, yet packaging and delivery fees are still excessive.

The brokerage firm questioned 80 restaurants in the top eight cities for the survey, which resulted in the report. It used a method of price comparison between online and offline prices.

It generated 240 orders, each costing between INR 120 and INR 2,800. A variety of quick-service restaurants (QSRs), full-service cafes, and ice cream shops were also chosen.

When compared to the printed menu price for dine-in, 80% of the establishments in the survey had higher menu pricing on meal delivery platforms.

“More than half of these restaurants charge a premium that is less than 10%, with the median at 10-11%. However, nearly 20% of them charge a premium that is in excess of 30% to the printed (online) menu pricing; we also saw a few instances of premium being over 40% (highest at over 60%),” the report said.

It should be noted that this price technique did not apply to all items on the menu; rather, it was only used for a few. Even some of the bigger restaurants are debating whether new items may be offered to allow for differential pricing through aggregators.

However, certain establishments, like ice cream parlours, charge less for their goods than restaurants do.

Customer discontent may result from these pricing increases. Additionally, it may open up new potential for hyper-local delivery services to permit restaurants’ deliveries. This appears to be a remote prospect at the moment, the report stated, considering the strong brand recall of Zomato and Swiggy.

Because the same foods are priced differently online and offline, Zomato has previously been accused of unfair business tactics. It declared at the time that it did not influence such price variations.

India’s industry for meal delivery has expanded rapidly in recent years. According to a survey, between 2022 and 2027, the Indian online food delivery industry is anticipated to expand at a compound annual growth rate (CAGR) of 28.9%.

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