Zepto Cafe Scaling Down Operations Amid Supply Chain Issues: Report

Zepto is reportedly scaling down as orders drop. A few months back, Zepto introduced its 10-minute food delivery service, Zepto Café, which is now set to be shut down as it battles supply chain issues and a shortage of trained staff to run kitchens. 

Zepto Café's growth and expansion slowdown coincides with the startups’ efforts to control their cash burn, citing sources familiar with the matter.

Sources also told the publication that Zepto has slowed the launch of its dark stores. 

Zepto spokesperson said that “Zepto Café order volume has grown by 700% year-on-year and 15% month-on-month, with 1,000 Cr. of annual net sales. We are continuing to double down on Café and expect it to continue growing, meaning this year.”

However, the company did not comment on the specifics of the cities planned for scaling its café business. 

This comes nearly two months after the quick food delivery arm of Zepto temporarily shut operations in about 44 cafes, impacting over 400 employees, across most states in the northern part of India. 

Besides, reports then said that Zepto decided to cut the workforce at many of its cafes.

Meanwhile, brokerage and analyst reports from the past few weeks have highlighted how Blinkit and Instamart are grabbing market share even as investments in dark store expansion and other operational capacity have reduced. 

Eternal-owned Blinkit and Instamart gained market share as per a report by ICICI Securities, with the former said to have seen a 25% growth in gross order value, compared to Instamart’s 22% QoQ growth in Q1 FY26. This is against a sector-wide 20% increase in GOV, indicating that the two listed players have managed to capitalise in the past quarter. 

The numbers also showed that Zepto lost some market share or did not see as much growth as it had held over previously.