Zepto Cafe Temporarily Closes 200 Stores Amid Muted Demand, Reallocates Workforce to Core Quick Commerce Units
- ByStartupStory | November 18, 2025
Zepto Cafe, the quick-service food vertical of the IPO-bound Indian instant-delivery startup Zepto, has temporarily halted operations at around 200 of its approximately 600 stores nationwide. The closures come amid muted or inconsistent customer demand at these locations, prompting Zepto to strategically realign resources and workforce toward its core quick commerce “dark-store” operations.
The affected stores primarily include outlets in regions where order volumes were below expectations and profitability remained elusive. Rather than layoffs, Zepto is redeploying employees from these cafes—typically two to three staff per outlet—to picker and packer roles in nearby dark stores that support its primary 10-minute grocery delivery service. This move aims to enhance workforce utilization and operational efficiency in higher-demand, profit-generating segments.
This is not Zepto Cafe’s first corrective action; in June 2025, the company paused operations at 44 cafes, mostly in smaller North Indian cities, with about 80% of those subsequently resuming activity as demand stabilized. The current restructuring signals a cautious approach to expanding foodservice beyond Zepto’s proven quick commerce grocery business, often described as a “course correction” rather than a complete exit from the cafe space.
Zepto Cafe was launched to leverage Zepto’s vast delivery network and dark-store infrastructure, targeting quick ready-to-eat and snack solutions with a promise of 10-minute delivery. However, scaling this model has proved challenging, given localized demand variations, supply chain complexities, and the economics of foodservice versus traditional pick-and-pack grocery formats.
The competitive landscape has intensifed, with rivals such as Blinkit’s Bistro, Swiggy’s Snacc, and other quick food delivery startups expanding aggressively, increasing pressure on Zepto Cafe to optimize its presence and focus on sustainable growth.
Zepto’s spokesperson reaffirmed the company’s commitment to the cafe vertical while underscoring the necessity to concentrate on markets and formats with stronger unit economics. The closures are described as temporary, with potential plans to revamp or relocate cafes based on realigned demand insights.
This restructuring coincides with Zepto’s ongoing capital raise activities, including a recent $450 million funding round led by California Public Employees’ Retirement System (CalPERS), which valued the company at around $7 billion and boosted its cash reserves.
In summary, Zepto Cafe’s decision to pause operations at 200 stores highlights the operational challenges faced by quick commerce startups branching into adjacent foodservice verticals. The company’s pivot back to its high-growth grocery delivery model aims to balance growth ambitions with unit economics discipline as it nears its IPO milestone.
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