Zepto is reportedly scaling down its 10-minute food delivery vertical, Zepto Café, as the quick commerce unicorn grapples with supply chain bottlenecks and a shortage of trained kitchen staff, according to an Economic Times report citing sources familiar with the matter.
The slowdown in Zepto Café’s expansion appears aligned with the company’s broader push to rein in operational expenses and cash burn. The report also suggests that Zepto has slowed the pace of launching new dark stores, which are central to its instant delivery infrastructure.
In response to queries from Inc42, a Zepto spokesperson stated:
“Zepto Café order volume has grown by 700% year-on-year, and 15%+ month-on-month with 1,000 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 provide details regarding the cities where the café vertical might continue to expand or scale down.
The development follows the temporary closure of operations at approximately 44 Zepto Café locations around two months ago, primarily in northern India—a move that reportedly affected over 400 employees. Reports at the time also pointed to workforce reductions across multiple outlets.
This retrenchment comes even as competitors such as Blinkit (owned by Zomato’s Eternal) and Swiggy’s Instamart are gaining market share. As per ICICI Securities, Blinkit saw a 25% quarter-on-quarter (QoQ) growth in gross order value (GOV) during Q1 FY26, with Instamart close behind at 22%, outpacing the sector-wide GOV growth of 20%. Zepto, by contrast, appears to have ceded some ground, according to the report.
Despite these challenges, Zepto Café has seen impressive traction. In February, CEO Aadit Palicha shared on LinkedIn that the vertical had reached 1 lakh orders per day, with an annualised GMV run-rate nearing $100 million. He also claimed the unit’s steady-state gross margin is around 50%, which is “already 10% higher than the scale of some of the top QSR chains in India.”
On the financial front, Zepto reported consolidated revenue of ₹4,454.52 crore in FY24, a 120% increase from ₹2,025.70 crore in FY23. Its net loss marginally narrowed by 2% to ₹1,248.64 crore from ₹1,271.84 crore in the previous year.
