NRAI refuses to support the launch of Zomato Gold on food delivery

The National Restaurants Association of India on Friday said it would not support Zomato launching its Gold programme on food delivery.

Zomato Gold, in a message to existing subscribers, said the premium membership programme which entitles subscribers to free dishes on their dine-in restaurant orders, will be expanding to 25 new cities and will also be available on Zomato delivery services.

Calling the extension of Zomato Gold to delivery a “desperate attempt” by Zomato to save the programme, NRAI said, “It is also another instance of Zomato changing the goalpost; Gold was originally launched as a tool to promote the culture of "Dining out" but now it is being extended on delivery too! Essentially, it is now a program that merely promotes deep discounts on both dine-in and delivery verticals, the cost of which is borne solely by the restaurant partners.”

NRAI said extension of Gold to delivery would be “suicidal” for the vertical.

A Zomato spokesperson said, “We have been in constant discussions with NRAI and have received a lot of useful feedback from them and partner restaurants on the Gold program. We have made significant changes to the Gold program. We have made sure that the program continues to be attractive for our members while becoming more sustainable for our restaurant partners.”

According to research conducted by consulting firm RedSeer this month, 90 per cent Gold members try new restaurants because of the offer and 95 per cent order more dishes or drinks because of their Gold membership.

On the restaurant side, according to RedSeer, 35 per cent saw increase in bill volumes, while 60 per cent of Gold partner restaurants saw an increase in the number of new customers.

After over a month of launching a protest against food aggregators’ deep discounting practices, NRAI has remained steady on its stand that they do not want to be part of Zomato Gold or any other deep discounting schemes.

“Zomato chooses to ignore the core issue of deep discounts. They have instead chosen to curtailed the usage term of the Zomato Gold users to contain the impact of discounts being borne by the restaurants. This is one more case of unilateral change of goalpost by Zomato. Zomato collects money from both; the Gold subscribers and restaurant partners; and yet keeps making unilateral changes on terms of engagement for both,” NRAI added.

The NRAI had launched a #Logout campaign on August 14 against aggressive pricing and deep discounting by restaurant aggregators, but over time, has expressed greater unhappiness with Zomato Gold. Zomato in its communication to subscribers has also mentioned that one one Gold unlock, or availing one free dish in an order, will be allowed for 1-3 diners on a table, while four diners will be eligible for two Zomato Gold unlocks.

Earlier this week, NRAI said talks with restaurant aggregators including Zomato, Swiggy, EazyDiner and so on had progressed well on certain issues. The issue has been going back and forth between both sides since over a month now, even though Zomato has made changes to its Gold offering.