Zepto Cafe hits pause in smaller cities amid supply chain woes and high burn

Zepto Cafe, the quick food service branch of Zepto, has temporarily closed in several smaller North Indian cities, including Agra, Chandigarh, Meerut, Mohali, and Amritsar. According to ET Now, around 44 cafes have shut down, affecting over 400 employees, including some from newly opened locations.

The closures are happening due to rising costs and supply chain issues. A Moneycontrol report says Zepto was spending Rs 250–300 crore per month late last year. Recently, that spending has dropped to about Rs 95 crore a month, down from Rs 115–120 crore in March and Rs 105–110 crore in January and February.

A big factor is Zepto’s push to hire more staff. The Aadit Palicha-led company is reportedly trimming store teams from nine people to seven or eight to lower expenses and streamline operations.

In a statement to ET Now, the company confirmed that the impacted outlets have been put on hold to resolve ongoing supply chain challenges. Zepto said it expects to resume operations in these locations by the end of the next quarter. “We remain committed to the cafe business and will invest aggressively going forward,” a spokesperson added.

Despite the turbulence, Zepto maintains an optimistic outlook. The company reported crossing 1,00,000 daily orders in February and expects that number to triple within the next 12 months.

This development comes as major competitors revisit their rapid food delivery strategies. Zomato recently shut down its 10-15 minute food delivery service, while Swiggy has scaled up Swiggy Bolt to more than 500 cities.