Zomato Withdraws Price Parity Clause From Restaurant Contracts

Eternal’s food delivery arm Zomato has withdrawn a contract term that obligated its restaurant partners to match the pricing at their walk-in outlets and websites to the price offered on the platform, company sources told Inc42.

As per the clause, Zomato could fine three times the differential amount for each order, if the restaurant partners violated the clause. The older version of the contract stated that Zomato could use customer complaints or even “mystery shopping” to investigate price disparity between a restaurants’ dine-in prices and cost on the platform. 

While the clause existed in the contract, it was never enforced, as per sources.  Inc42 has reached out to Zomato to seek clarification on the development. The story will be updated based on its response. 

Reuters reported the development first. As per its report, the clause was opposed by the National Restaurant Association of India (NRAI) as it restricted restaurants’ pricing ability.

Last year, Zomato was seeking feedback from its restaurant partners to bring alterations to its commission models. These discussions were kicked started due to intensified competition after Rapido entered the foodtech space with Ownly. However, nothing concrete came from this.

In the past, Zomato had also rolled out a policy under which refund costs were to be split equally between the platform and restaurant partners. However, it was put on hold after receiving cold response from the restaurant partners. 

On the consumer front, the listed foodtech giant hiked its platform fees by nearly 20% to ₹14.9 per order on a pre-GST basis in March. This price increment came within months of it hiking the platform fee to ₹12.5.

Zomato’s to and fro around restaurant partner policy comes at a time when West Asia conflict has put a major burden on eateries due to difficulties in procuring LPG. The prices of the gas have gone up significantly since March, resulting in restricted deliveries to temporary halt in operations.

This, in turn, is also expected to have some pressure on the financial performance of food delivery platforms. A market analyst Inc42 spoke with in March said that while the current disruption may be temporary, restaurant-side constraints could quickly reflect in platform metrics. “Even a short-term LPG shortage could translate into fewer active restaurants, reduced menu availability and lower order volumes which will trigger investor reaction” the analyst had said.

While Eternal’s Q4 FY26 results are due next week, Zomato raked in an operating profit of ₹547 Cr (up 27% YoY) during the December quarter. The segment’s revenue grew 29% YoY to ₹2,676 Cr.  

Eternal’s net profit jumped 73% to ₹102 Cr in the quarter, while operating revenue surged more than 3X to ₹16,315 Cr, largely due to Blinkit’s shift to inventory-led model.

Shares of Eternal ended today’s trading session 1.16% lower at ₹259.90 on the BSE.

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