Deep Discounting Promotional Strategy or Damaging Attribute for Restaurant Industry

Deep Discounting Explained

Deep Discounting means heavy discounting or selling below the MRP. It's a promotional strategy used to attract customers and boost sales. In the restaurant business, we've seen deep discounting by Swiggy, Zomato, and other food delivery apps. This is done to lure customers away from eating at restaurants and instead order in.

Benefits of Deep Discounting

Deep discounting by food delivery apps like Swiggy, Zomato, and Uber Eats is making it difficult for restaurants to continue operating profitably in India. These apps offer steep discounts on orders, which often leads to restaurants losing money on each order.

Damage by Deep Discounting?

While this may be great for customers in the short term, it's not so good for restaurants. Deep discounting means that restaurants make less profit per dish sold. Over time, this can really damage their business and make it difficult to continue operating. This deep discounting is not sustainable in the long run and is damaging the restaurant ecosystem in India. This is not just limited to restaurants; small businesses like cafes and bakeries are also struggling to cope with the heavy discounts offered by food delivery apps. Many of them have already shut down, and more are likely to follow suit unless something changes.

Restaurants are struggling to cope with the rising costs of food and labor, and the deep discounts offered by food delivery apps are compounding these problems. Many restaurants have already shut down due to the financial strain caused by deep discounting, and more are likely to follow suit unless something changes.

What's more, deep discounting is often not sustainable in the long run. Once a customer gets used to getting a dish for 50% off, they'll be expecting that same discount every time. This puts pressure on restaurants to keep offering deep discounts, which is not sustainable in the long term.

So, while deep discounting may seem like a great way to attract customers in the short term, it's really not good for businesses in the long run. It's important to think about the bigger picture when choosing where to eat or get your food delivered from. Otherwise, you might end up harming the very businesses that you love!

What is the Effect of Deep Discounting?

Regularly more and more restaurant owners are opting out of their listing from such apps. As a result, this is having a direct impact on the business of restaurants because they are no longer getting customers from these apps. If this continues, it will lead to many restaurants shutting down, and this will have a ripple effect on the entire ecosystem.

What can be done about it?

It's important to support your local restaurants and businesses, especially during these difficult times. Order directly from their websites or give them a call instead of using a delivery app. This way, you can be sure that your favorite restaurants are getting the full price for their dishes and not being forced to sell at a deep discount.

The restaurants themselves also need to stand up for their rights and demand better terms from the food delivery apps. Only by taking these measures will the restaurant industry in India be able to survive and thrive in the long run.

The government needs to step in and regulate the food delivery app industry to prevent further damage to the restaurant sector. The government is taking some measures to protect the restaurant industry from deep discounting. The National Restaurant Association of India (NRAI) has been campaigning against deep discounting for some time now, and they have finally gotten the government's attention.

The Ministry of Food Processing Industries has set up a committee to look into the matter and make recommendations on how to protect restaurants from deep discounting. The committee is expected to submit its report soon, and it is hoped that the government will take action based on its findings.

NRAI has also filed a petition in the Delhi High Court against food delivery apps like Zomato, Swiggy, and Uber Eats. The petition alleges that these apps are engaged in unfair trade practices and are harming the restaurant industry.

Only by taking these measures will the restaurant industry in India be able to survive and thrive in the long run.

What do you think should be done to solve this problem? Share your thoughts in the comments section below.