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Online food platforms to redesign schemes to check deep discounts: FHRAI

Discounting works well in the retail space, because brands can limit supply or at least make it look like supply is limited, and therefore create a sense of urgency in the eyes of the consumer, the statement said.

, ET Bureau|
Updated: Aug 21, 2019, 02.39 PM IST
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"Unlike retail, where end of season sale is to clear leftovers, a restaurant doesn't serve leftovers at a discounted price. It's all prepared fresh and made to order," NRAI said.
NEW DELHI: A day after providing intimation to the Food Service Aggregators (FSAs) regarding various issues hurting the industry, the Federation of Hotel & Restaurant Associations of India (FHRAI) siad it has chalked out an action plan to take it up with the concerned organisations and departments. Based on complaints and grievances received from restaurateurs across the country, the FHRAI said it has consolidated the most common issues caused due to the FSAs’ 'unfair business conduct.'

The Apex hospitality body said it has sought inputs from its regional Associations including HRANI, HRAWI, HRAEI and SIHRA; as well as other affiliated associations for coming up with a comprehensive report to sort out all matters related to the FSAs that are affecting the industry.

“We have reached out to the FSAs and have asked that we sit across the table to arrive at a win-win outcome for all. In the letter marked to the founders and CEOs of the online food delivery we have submitted a list of issues that our members are facing while dealing with them and have suggested constructive options against the issues listed. We are yet to hear from them. Meanwhile, we are consolidating inputs from all our members and affiliate associations and have come up with action points to get the concerns acknowledged and addressed on behalf of the fraternity,” said Gurbaxish Singh Kohli, vice president, FHRAI.

FHRAI said it has narrowed down six points to action which include consulting Industry Associations, profitability, unfair customer appeasement practices, deliberate policing, competing with each other and legal and taxation aspects.

“A win-win situation is a need of the hour and any strategies adopted by the FSAs for their profits should directly benefit the restaurant industry too,” Kohli added.

FHRAI has highlighted that with consumers having become more used to ordering food online, the FSAs have adopted appeasement practices by offering discounts which in turn is creating a dent in the restaurant industry and taking a toll on its profits.

“While FSAs are floating offers and discounts to lure customers, it is coming at a cost to the restaurants. Restaurants may be able to sustain such discounting only for so much time because an enterprise has overheads and operating costs. If a restaurant withdraws from discounting, the FSAs app immediately downgrades it and favours another restaurant which may still be in a position to discount. This is just not fair. It’s pitting one restaurant against another basis their capacity to afford discounting. Additionally, the industry feels that with easy access to the consumer through their e-commerce platforms, the FSAs have deliberately started policing the restaurants,” said Pradeep Shetty, honorary joint secretary, FHRAI.

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