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Zepto Cafe Halts Operations in 44 Stores Across North India Amid Supply and Staff Crunch

• ByStartupStory     |    May 24, 2025

In a significant move that underscores the intensifying competition in the food and quick commerce sector, Zepto has temporarily paused its Zepto Cafe operations in 44 dark stores across North India. The pause is attributed to a supply crunch and staffing challenges, with some employees failing to report to work, Moneycontrol has reported.

Zepto Cafe — the quick commerce firm’s food arm offering ready-to-eat items like coffee, tea, puffs, pizzas and more — was introduced as an alternative to ordering from traditional food delivery platforms like Zomato and Swiggy. The company currently operates nearly 1,000 dark stores across India.

Sources indicate that the cafe services are currently unavailable in several key northern cities including the Delhi NCR region, Agra, Meerut, Haridwar, Gorakhpur, Mohali, Amritsar, and Ghaziabad. “A total of 44 stores have been impacted and services should resume by Q2, during the July-September quarter,” a source told Moneycontrol.

The pause in services is particularly significant in the Delhi NCR belt, a region heavily dominated by Zomato and Blinkit — both owned by parent company Eternal. The move could potentially create an opening for food delivery giants to recapture lost market share from emerging quick commerce rivals.

As part of the temporary closure, Zepto reportedly transferred most of its kitchen staff to other operational locations. However, around 15 staff members chose to resign rather than relocate, according to company insiders.

A Zepto spokesperson did not respond to queries regarding the development.

The development was first reported by NDTV Profit and comes at a time when the competition in the food and grocery delivery space is reaching new heights. Quick commerce players like Zepto, Blinkit, and Swiggy Instamart have been actively encroaching on the territory traditionally occupied by restaurant-based delivery platforms.

“…growth does remain below our expectations for now. Competition from quick delivery of packaged food from quick commerce (is) leading to (a) drop in (the) demand for food delivery from restaurants,” Deepinder Goyal, Group CEO at Eternal, said during the company’s May 1 earnings call.

If Zepto’s cafe operations remain paused for longer or are scaled down in additional cities, analysts suggest that traditional food delivery platforms could regain some of the market traction they had previously lost.

Despite the operational hiccup, Zepto Cafe has seen notable success in its short run. CEO Aadit Palicha had previously stated that the service was handling 1 lakh orders per day and was nearing a “$100 million annualised gross merchandise value (GMV) run-rate.” He also noted that the unit had a “50 percent steady-state gross margin.”

Zepto Cafe faces competition not only from traditional players like Zomato and Swiggy but also from new-age offerings such as Bistro by Blinkit and Swish, the latter of which is currently limited to Bengaluru but has plans for focused expansion.

The pause in Zepto Cafe’s services may be temporary, but the implications are being closely watched across the quick commerce and food delivery ecosystem as stakeholders look to navigate the shifting dynamics of consumer behavior and market competition.

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