Food delivery platforms Swiggy and Zomato are facing operational challenges due to a looming LPG crisis in India. The shortage of LPG, exacerbated by global events, is impacting partner restaurants and supply chains, leading to restricted deliveries and operational disruptions.
While quick-service restaurant chains have been less affected due to their reliance on electric appliances, approximately 90% of India’s 5 Lakh restaurants heavily depend on commercial LPG cylinders. Limited inventory buffers have resulted in lower order fulfillment rates, putting operational stress on a significant portion of the industry.
The crisis has also affected the stock market, with shares of Zomato’s parent company Eternal dropping nearly 5% and Swiggy hitting a 52-week low. Global tensions, particularly concerning the US-Israel-Iran conflict, have further contributed to the energy market instability.
Industry experts warn of potential severe impacts on the restaurant sector. Anurag Katriar, former president of the NRAI, highlighted the risk of operational stress for a substantial number of restaurants if the supply shortage persists. Some eateries in major cities like Delhi-NCR, Bengaluru, and Mumbai have already ceased operations, with fears that permanent closures may follow.
Source: Inc42 Media