Zepto Cafe Faces Temporary Closures in North India

Zepto Cafe, the rapid food service division of Zepto, has temporarily halted operations in several smaller cities across North India, including Agra, Chandigarh, Meerut, Mohali, and Amritsar. As reported by ET Now, approximately 44 cafes have closed, impacting more than 400 employees, some of whom are from newly launched locations.

Reasons for the Closures

The shutdowns are attributed to escalating expenses and supply chain complications. A report from Moneycontrol highlighted that Zepto was spending between Rs 250 and 300 crore monthly late last year. Recently, this expenditure has been reduced to around Rs 95 crore per month, down from Rs 115-120 crore in March and Rs 105-110 crore during January and February.

Staffing Adjustments

A significant reason for these changes is Zepto’s initiative to recruit additional personnel. The company, led by Aadit Palicha, is reportedly decreasing store teams from nine members to seven or eight in an effort to cut costs and optimise operations.

Official Statement from Zepto

In a statement to ET Now, Zepto confirmed that the affected cafes have been put on hold to address ongoing supply chain issues. The company anticipates resuming operations in these cities by the end of the upcoming quarter. A representative mentioned their continued commitment to the cafe business, stating intentions to invest aggressively in the future.

Future Outlook

Despite the current challenges, Zepto exhibits a positive outlook. The company reported achieving over 100,000 daily orders in February and anticipates that figure will triple over the next year.

Industry Context

This situation arises as major competitors reassess their food delivery strategies. Recent actions include Zomato discontinuing its 10-15 minute food delivery service, while Swiggy has expanded Swiggy Bolt to more than 500 cities.