Zomato Tells BSE Most Blinkit Stores Have Reopened After Wage Protests

Food delivery firm Zomato Ltd said on Wednesday most stores of its grocery unit Blinkit had resumed operations after being shut following  protests by delivery partners .

“Over the last few days we have made changes in the delivery partner payout structure with respect to the Blinkit business to address the needs of delivery partners, improve customer experience and reduce cancellation/ order rejection frauds by few delivery partners in the system. Such changes are done from time to time, as needed,” said the company in a letter to the BSE.

“We had to shut down some stores for a few days to ensure safety of our employees at stores and the delivery partners. Most of these stores have now resumed operations,” said the letter.

Zomato said that the protests had no impact on its operations or financial performance (meaningfully less than 1 per cent revenue impact). “Hence we believe that this event does not warrant any disclosure under regulation 30 of the SEBI (LODR) Regulations, 2015,” said the letter.

Blinkit recently shut down some stores in Gurugram, Haryana, after delivery workers went on a strike. A company notification, which was seen by 'Business Standard', on its delivery partner app said the stores are being shut because partners hadn’t worked for the past 3-4 days.

An estimated 2,500 Blinkit delivery executives have been on strike in Gurugram since April 12, after the company slashed fixed pay-outs per delivery for them, under recent changes in the delivery incentive structure.

Under the new structure, workers will receive Rs 15 for each delivery within a one-km radius, against the Rs 25 rate before. Furthermore, for any distance travelled over 1 km, workers would be compensated based on the additional distance between the range of Rs 10 to Rs 14 per km.

The company has confirmed that Noida and Gurugram were affected by the strikes.

Unlike food delivery where delivery workers deliver orders from restaurants, quick commerce operates using the ‘dark store’ model. These are large retail facilities that resemble a conventional supermarket but are not open to the public and they are operated by quick commerce firms.

The firm’s rival Swiggy Instamart had, in September last year, seen similar protests from its delivery workers in Chennai over a revised payment structure which cut delivery incentives and reduced fuel allowances.

According to a report by ICICI Securities on Monday, Zomato has already lost 1 per cent in revenue from Blinkit in the first quarter of FY24.

“We estimate Blinkit was operating ~370 dark stores pan India as of Q3FY23. This implies that about 25 per cent of the dark stores are currently not operational. Given that at least 3-4 days’ sales have been lost, this implies a one per cent loss in revenue from Blinkit and around 0.15 per cent of consolidated revenue for Q1FY24, already,” said the ICICI Securities report.