Zepto Cafe, the quick-service food division of fast-growing quick-commerce firm Zepto, has temporarily suspended operations in multiple smaller North Indian cities due to escalating operational costs and persistent supply chain issues. The move affects 44 outlets in multiple locations including Agra, Chandigarh, Meerut, Mohali, and Amritsar. The company stated it aims to resume services in these regions by the end of the upcoming quarter.
Zepto Cafe, which offers items like coffee, snacks, and ready-to-eat meals, was launched as Zepto’s entry into the competitive food delivery market, a space largely dominated by Swiggy and Zomato. Currently, its menu includes 148 items intended for 10-minute delivery – and the quick food delivery model places a lot of emphasis on logistics and coordination. However, the company is now facing logistical and financial pressures, thus forcing this temporary scale-back outside major urban centers. So if you are one of those who relied on Zepto Cafe for quick delivery of coffee, snacks, or ready-to-eat meals, this service will no longer be available, and there is one less option in the quick-service food delivery market. On the other hand, this could lead to an upstick in orders from Snacc or Bolt.
This development means that Zepto is following in Zomato’s footsteps – the food delivery aggregator recently discontinued its 10-15 minute delivery service, Quick, owing to similar concerns. In contrast, Swiggy has scaled its fast food offerings, including ‘Snacc’ and ‘Bolt’, across hundreds of cities.
Reports indicate Zepto’s monthly expenditure, which peaked between ₹250 and ₹300 crore late last year, has clocked a recent dip. Expenditures dropped to ₹95 crore in April, down from ₹115–₹120 crore in March. This reduction comes as the company faces pressure to control costs within the capital-intensive quick commerce sector. A major portion of these expenses stems from staffing, with Zepto reportedly paying ₹95 crore in wages to approximately 3,000 employees in April.
To improve efficiency, Zepto has adjusted staffing levels at its cafes, reducing average team sizes from nine employees to seven or eight per location. While most employees from the shuttered outlets have reportedly been reassigned to other stores, some individuals have declined transfers and exited the company. Sources familiar with the situation estimate over 400 employees are impacted, though internal claims suggest the figure may be lower. For now, Zepto intends to make the suspension of operations a temporary measure, and the closures will provide time to address supply chain challenges, optimize vendor relationships, and refine kitchen operations and demand mapping before resuming operations next quarter. “We remain committed to the cafe business and will invest aggressively going forward,” a spokesperson for the firm stated.
Despite the temporary pullback, Zepto Cafe remains part of the company’s overall strategy – CEO Aadit Palicha reportedly stated the cafe division reached 100,000 daily orders and was nearing a $100 million annualized gross merchandise value (GMV) run rate. In addition to this, the company also previously outlined intentions to expand with over 100 new cafes monthly, targeting a ₹1,000 crore revenue run rate by next year.
