Restaurants facing ‘extinction crisis’ due to delivery commissions
Anurag Katiar believes discounts and commissions are out of control
The president of the National Restaurant Association of India has said that the industry is facing an ‘extinction crisis’ due to high delivery commissions and aggregator-enforced discounts.
Speaking at the UAE Restaurant Community webinar on Wednesday, March 13, Anurag Katiar said “there is a huge benefit that comes to the consumer from the current delivery model. There is convenience, there is comfort, and there is choice, but there is also the fourth C, commission, which kills us as restaurants”.
Katiar told the webinar that when Zomato first launched in India it was only taking 6% in commission from its restaurant partners, but that has now risen four-fold, which he said restaurants “cannot survive”.
The Indian restaurant figurehead also spoke out against the heavy discounting common on delivery platforms, saying it is “the biggest pain we are facing”.
Katiar said that “in their mad pursuit of a larger market share” aggregators “are peddling discounts as the only way to build the market, which is an absolutely rubbish narrative. People don’t buy discounts, they buy good products”.
You can full the view webinar here, with Katiar also joined by Jon Sewell president of Motus Food Delivery and chairman of Chomp Food Delivery, who explained how restaurant owners in Colorado successfully implemented a similar project, and Iiko Middle East CEO Leo Komissarov and Golden Fork’s Shanavas Mohammad who introduced the UAE Restaurant Community and what it aims to achieve with it ownlocal restaurant delivery system.