Pune, August 17, 2019 : Alleging that Zomato Gold is resorting to unjust practices and hurting their business, the Pune Restaurant and Hoteliers Association (PRHA) has decided to #LogOut from Zomato Gold. There are 850 restaurants, hotels as members of PRAHA.
PRAHA president Ganesh Shetty said, “Being one of the largest employers in the country, the F&B industry is going through a very tough time due to increased rents, no ITC on GST, and various other reasons. Few aggregators have made deep discounting a norm and most restaurants fell prey to it because of the fear of missing out and losing consumers. These aggregators are having a field day at the expense of our businesses due to the lack of unity.”
He further added, “For the first time in a nationwide movement, hundreds of restaurants have come together to put a stop to this bullying. It’s not permanent and very soon discounting will come back to your favorite restaurants but in a way that supports our businesses and consumer interests equally.”
According to hotel owners, many restaurants have to shut down and the industry has a high mortality rate. The majority share is taken by deep discounting and aggregators and once we emerge from this, we would be able to utilize the same funds towards better products, services, and experience.
“Few good aggregators have been dragged down because of a particularly notorious one and this will be sorted soon. In the meanwhile, keep showing us your love and we promise to do our best to give you world-class experiences. We will no longer be honoring Zomato Gold”, Shetty’s press release stated.
When contacted Zomato spokesperson said, “We have reached out to our restaurant partners to hear their concerns, and have offered our full support. It pains us to see that we could not create a sustainable Gold program for all, one which works as well for restaurants as it does for consumers. We urge our restaurant partners to work with us in resolving this.”
In a series of tweets, Deepinder Goyal, Founder & CEO of Zomato, stated his thoughts on the restaurant industry’s stand against deep discounting. “Zomato Gold has been a major hit, but we understand that bargain hunters have also joined Zomato Gold and they are hurting some segments of the restaurant industry very badly. I am sad that young entrepreneurs (much like me) in the restaurant industry are feeling the pressure to such an extent that they had to launch such a campaign. We set out to create a company which can create a massive impact on consumers, as well as business owners. Somewhere, we have made mistakes and things haven’t gone as planned. This is a wake up call that we need to do 100x more for our restaurant partners than we have done before”
He further added, “We are committed to work with the industry and make modifications to Zomato Gold which will result in a win win situation for restaurants and consumers. Just like last year, when we changed some rules around Gold after hearing about the concerns of the restaurant community. In the interest of consumers, we request restaurant owners, to stop the logout campaign, and have a collaborative discussion with internet aggregators for finding a sustainable way forward.
I would also want to urge the restaurant industry to proactively look for ways to reduce operating costs, so that eating out becomes more affordable for consumers – our only objective here is to drive the growth of the restaurant industry.
Take a look at this data – the avg price of a delivery order in India is just about the same as that of China. However, per capita income in China is 4.5x as that of India. It’s important we bring down prices to find sustainable growth in the food sector in our country.
What’s good for restaurants is good for Zomato. What’s good for consumers is good for Zomato. Finding the right balance and product market fit is the restaurant industry’s problem (and that includes us).”