Zepto Cafe shuts down operations in 44 stores due to…, affected areas include…, will resume working…
New Delhi: In an unexpected move, Zepto, the quick commerce player, has temporarily stopped operations in 40 Zepto cafes. These operations have been halted in selected areas in and around Delhi. Reportedly, the step has been taken for Zepto to adjust its supply chain to meet surging demand. This information was shared by sources familiar with the matter.
Zepto Cafe is currently unavailable in the Delhi-NCR, Agra, Meerut, Haridwar, Gorakhpur, Mohali, Amritsar and Ghaziabad, said a source adding, “A total of 44 stores have been impacted and services should resume by Q2, during the July-September quarter.”
It is further reported that the cessation of operations is expected to last only until September while the company addresses its supply chain challenges.
“Zepto was getting unprecedented demand which was not matching the vendor availability. To ensure that quality and service are not compromised, the company is halting operations in 40 stores in and around Delhi.
“Less than 100 people have been impacted by this move. Those impacted have been given choice to shift to nearby stores or kitchens, as the company wants to retain them for when operations start again somewhere around in September,” a source told news agency PTI.
Zepto’s café division operates over 1,000 locations and was processing nearly 100,000 orders daily. In fact, it was about to achieve US$100 million in annualised gross merchandise value (GMV), according to CEO Aadit Palicha who said that the unit consistently maintained a 50 per cent gross margin.
Employees who have been affected by the temporary closure were informed of the decision on April 20 and given a month to decide whether to transfer to nearby locations.
Currently, Zepto operates around 750 cafes.
Meanwhile, a Moneycontrol report says that Zepto has discontinued its cafe services in over seven north Indian cities as the company faces a supply crunch and some of its employees haven’t reported to work.
Zepto Cafe sells short eats like coffee, tea, puffs, and pizzas.
Zepto was founded in 2021 by Aadit Palicha and Kaivalya Vohra as part of the emerging rapid commerce in India.
Aadit Palicha, Zepto Cafe CEO said, “Had 1 lakh orders per day and was closing in on a $100 million annualised gross merchandise value (GMV) run-rate. The unit has a 50 percent steady-state gross margin.”
It remains to be seen how Zepto will recover and bounce back in a market that is dominated by platforms like Zomato and Blinkit.
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