Zepto Cafe is reducing its network of cafes and decreasing its food assortment following a period of rapid growth. It has been calculated that the number of Zepto Cafe outlets has dropped to approximately 250–350 from a peak of 850–900, as the company focuses on the most successful markets.
Although Zepto Cafe previously reached a daily order volume of 100,000, which led the company to view it as a significant growing business, there is now a reduction in the number of establishments. Analysts note that Zepto Cafe's contribution to the company's overall business has sharply decreased, and the company has also sold equipment from closed locations.
The founder and CEO of Zepto, Aadit Palicha, previously shared business achievements on social media, announcing that the cafe had reached around 100,000 daily orders. In February 2025, Palicha wrote that 'Zepto Cafe reached 100,000 orders per day. This approaches an annual GMV (Gross Merchandise Value) of $100 million with a stable gross margin of nearly 50%.' He also added that, as a relatively new player, the current scale of Zepto Cafe exceeded more than 10 percent of the size of some leading Quick Service Restaurants (QSRs) in India.
Previously, in December 2024, when Zepto Cafe launched as a separate application, it recorded 30,000 daily orders. However, in January 2025, daily orders surpassed the 50,000 mark, demonstrating a 60 percent month-over-month (M-o-M) growth. Later, in the first 10 days of February of the same year, the company reached 75,000 daily orders, marking a 50 percent month-over-month increase.
Decline in Zepto Cafe's Contribution
Over the past year, Zepto Cafe's share in the company's overall business has significantly diminished. One analyst, who wished to remain anonymous, reported that at its peak, the business accounted for about 8–9 percent of Zepto's total revenue, but this figure has now fallen to approximately 2–3 percent.
Another analyst, who also requested anonymity, noted that the company initially planned for the cafe to become a much larger part of its operations, setting an internal target of 15–16 percent. However, this goal was not achieved despite the rapid growth in order volumes.
Interestingly, the company did not disclose any performance metrics for Zepto Cafe regarding order volume or revenue contribution in its Draft Red Herring Prospectus (DRHP). However, it mentioned that in the fiscal year 2025–26 (FY26), the company had to write off about 8 crore worth of inventory, and in FY25, about 61.4 crore, because the inventory (food products) was losing value or selling slowly.
Although Zepto did not respond to this newspaper's requests, a source familiar with the company's developments stated that since the cafe's contribution to the overall business never exceeded 1 percent, it was not mentioned in the DRHP. This source also added that they had to scale back cafe operations because it became clear after the aggressive expansion phase that the same assortment did not perform equally well in all locations. Furthermore, concerns arose regarding hygiene, staff training, and adherence to food safety standards, forcing the company to reduce its menu.
What Awaits Zepto Cafe?
According to previously quoted analysts, further rationalization may occur. One suggested that over the next six months, the company might close another series of cafes, especially in markets where the business failed to achieve sufficient order density or justify the operating costs of specialized kitchens. This analyst also noted that the company has stopped promoting the business as aggressively through advertising and marketing as before. 'The strategy is now focused on retaining cafes in select high-performing markets, rather than broad expansion,' he stated.
Another analyst emphasized that premium locations, including parts of South Delhi, continue to generate relatively higher demand, but outside these high-density zones, the economics of running specialized cafe operations remain challenging. Nevertheless, the company's leadership stated that the company remains hopeful and does not plan to wind down operations. 'Zepto Cafe is still in an experimental stage for us. We are actively working on it. We have recalculated some strategies, such as changing the menu to find the best fit for different locations, and we are selling some equipment to acquire better assets,' he added.