Zepto is reportedly scaling down its 10-minute food delivery service, Zepto Cafe, amid ongoing supply chain disruptions and a shortage of trained kitchen staff.
According to sources familiar with the situation, Zepto is also slowing the launch of its dark stores. This move comes as the startup looks to reduce cash burn and control expenses during a crucial phase of its operations.
In response to questions from a publication, a Zepto spokesperson stated, “Zepto Café order volume has grown by 700 percent year on year and 15 percent plus month on month with 1000 crores of annual net sales. We are continuing to double down on Café and expect it to continue growing meaningfully this year.” However, the company did not share details about which cities are included in the cafe expansion plans.
This development follows a temporary shutdown in operations across around 44 Zepto Cafe locations nearly two months ago. The closures, which took place in most northern states of India, affected over 400 employees. Reports at the time also noted workforce reductions across several of the company’s cafe outlets.
Meanwhile, market analysts and brokerage data suggest that competitors like Blinkit and Instamart are increasing their market share. Recent reports show that Blinkit posted a 25 percent growth in gross order value in the first quarter of FY26, while Instamart recorded 22 percent quarter-on-quarter growth. These numbers are above the industry average of 20 percent, indicating both companies have strengthened their positions while Zepto’s growth appears to have slowed.
Earlier this year, Zepto cofounder and CEO Aadit Palicha shared that Zepto Cafe had reached 1 lakh daily orders. In a LinkedIn post, he revealed that the business was nearing a 100 million dollar annualised gross merchandise value run rate, maintaining a steady-state gross margin close to 50 percent. He also noted that this margin is already 10 percent higher than some of the top quick service restaurant chains in India.
Financially, Zepto’s consolidated revenue more than doubled to INR 4454.52 crore in FY24, a 120 percent increase from INR 2025.70 crore in FY23. The company also managed to slightly reduce its net loss, which stood at INR 1248.64 crore in FY24 compared to INR 1271.84 crore the previous year.
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