pulls the plug from its cloud kitchen biz in 12 cities has pulled the plug from its cloud kitchen vertical in 12 cities including Delhi (NCR), Mumbai and Chennai as orders have fallen by 80% due to the Covid-19 pandemic. The company is now operating in Bengaluru, Hyderabad and Coimbatore only.

The shutting down of outlets in these cities is not surprising as people have been avoiding ordering food due to the fear of the spread of the virus. Food delivery business is one of the badly hit businesses during the pandemic with Zomato and Swiggy hardly managing to achieve about half of their pre-covid peak volume.

Swiggy had also scaled down its cloud kitchen business by 40-50% because of weak demand. The company had also laid off a sizeable workforce engaged in the vertical., which sells through the app and through food-ordering platform, Zomato had clocked about 35,000 daily orders in February this year. According to Entrackr sources, the order numbers have fallen to under 5,000 in the last two months. 

“The real estate cost along with salaries of staff was not justifiable as there is no clarity when people would resume frequently ordering from,” said one of the sources on condition of anonymity. The company also fired 70% of the workforce looking after the cloud kitchen business.

The firm was running around 55-60 kitchens as of February this year. Queries to seeking details on the cloud kitchen business didn’t elicit any immediate response.  

Inc42 had reported the development first.

The Mukesh Bansal-led company had also started offering grocery products since the beginning of this year under Sources emphasised that the grocery vertical has been performing decently.

Hyperlocal logistic company Shadowfax also forayed into cloud kitchens with several outlets in Pune. However, the company had put a brake on its expansion and fired over 50 employees from the newly created division.

About Author

Send Suggestions or Tips