People love dining outside, whether it is a hearty brunch or a candlelight dinner. Many individuals find that pricey meals become somewhat affordable thanks to the numerous offers made to special members on Swiggy One, Zomato Gold, and similar food aggregating platforms. Nevertheless, this may have a negative effect on eateries. Restaurants have received a warning from the National Restaurant Association of India (NRAI) over the possible long-term harm caused by aggregator payment platforms and in-dining deep discount schemes, as reported by news agency IANS.
NRAI’s Concern Over In-Dining Discounts Given By Restaurants
NRAI is the organisation that represents more than 5 lakh restaurants in the hotel industry and cautions that these temporary advantages may jeopardise the enterprises’ financial viability and independence and upend the restaurant ecosystem.
Sagar Daryani, president of NRAI, stated that decisions made now will determine the independence and viability of dine-in operations in the future. When combined with aggregators’ payment gateways, deep discounting presents long-term problems even if it may seem alluring in the short term, as reported by news agency IANS.
The NRAI cautions that aggressive aggregator payment gateway adoption is being utilised to grab the dine-in business, creating a number of problems for restaurants and that heavy pricing is creating difficulties in the food delivery sector. These gateway networks, which are occasionally promoted at the expense of the eateries themselves, provide customers with rewards and discounts. They do, however, demand hefty transaction costs, ranging from 4% to 8%, which is greater than the 1 to 1.5% required by conventional payment processors.
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How Do These Discounts Affect The Restaurants?
The restaurant industry’s extreme discounting, which modifies price structures, creates irrational customer expectations, and devalues the eating experience, presented serious economic issues, according to the NRAI, as reported by IANS.
The industry body mentioned that because they lack the financial resources of larger, better-funded competitors, small, independent businesses are disproportionately affected by these practices, making it more difficult for them to compete and thrive.
Due to a greater dependence on gateways, restaurants run the danger of losing their customer relationships, which could compromise their independence and integrate them into the aggregator’s ecosystem.
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Given the financial ramifications of significant discounting promotions, the NRAI has advised restaurants to carefully review the terms and conditions of aggregator payment systems, as reported by IANS.
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