Restaurants jack up prices on Swiggy, Zomato by an average 10%

Citing higher costs from commissions and promotions, restaurants have begun charging consumers an average of around 10% more—the highest was a 60% premium—on food delivery apps Zomato and Swiggy than the prices listed on menus in their stores, according to a report by Jefferies. “Profitability focus has pushed food-tech companies such as Zomato and Swiggy to raise take rates (take-out charges), which in turn has prompted restaurants on differential pricing—packing and delivery charges remain over and above,” Jefferies said in a note on Wednesday. The brokerage surveyed 80 restaurants across the top eight cities, comparing their online and offline prices. In all, it created 240 orders ranging from ₹120-2,800 per order and selected a mix of quick service restaurants (QSRs), full service, cafes, ice-cream parlours, etc. An estimated 80% of restaurants it surveyed followed differential pricing that was higher for online orders. “On food delivery platforms, 80% of the restaurants we looked at have menu pricing that is higher than the printed menu price for dine-in. More than half of these restaurants charge a premium that is less than 10%, with median at 10-11%. However, nearly 20% of them charge a premium that is in excess of 30% to the printed (online) menu pricing; we also saw a few instances of premium being over 40% (highest at over 60%),” they said. However, such pricing strategy was followed largely on selected items and not the entire menu. “Industry interactions indicate some larger restaurants toying with the idea of different products for aggregators to enable differential pricing (e.g. one plate of idli has two pieces in delivery versus three in dine-in),” analysts said. The premium charged by branded QSRs is as follows: Subway 10-15%, KFC 10%, Pizza Hut 5-6% and Dominos 4%.

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