200 Zepto Cafe Outlets Closed as Focus Returns to Dark Store

Zepto, India’s leading quick commerce player, has announced a major operational restructuring, which involves the temporary shutdown of approximately 200 “Zepto Cafe” outlets across its operational cities.

The move is a calculated strategic pivot aimed at consolidating resources and manpower to reinforce the company’s core 10-minute grocery delivery business, which operates through a network of dark stores.

The Zepto Cafe initiative, launched earlier this year, was the company’s ambitious foray into delivering ready-to-eat and ready-to-drink products, such as coffee, snacks, and freshly prepared items, often operating adjacent to their main grocery dark stores.

While the venture demonstrated strong initial traction and high customer engagement, sources indicate the rapid scaling faced challenges related to supply chain complexity and achieving high unit economics necessary for sustained profitability in a hyper-competitive quick commerce environment.

Zepto Workforce Reallocation: A Focus on Dark Stores

Crucially, the decision is not being accompanied by layoffs.

Instead, Zepto has confirmed that the workforce previously engaged in operating the 200 Zepto Cafe units—which includes delivery personnel and on-ground operational staff—will be immediately reallocated to bolster the company’s main quick commerce dark store operations.

This reallocation serves two critical purposes:

1. Reinforcing Core Operations: It injects experienced operational talent directly into the high-volume grocery delivery segment, helping Zepto maintain its aggressive 10-minute delivery promise and improve efficiency as it prepares for seasonal demand spikes.
2. Maintaining Employment: By avoiding retrenchment, Zepto maintains its talent pool, preserving institutional knowledge while affirming its commitment to its employees during a period of strategic reorganization.

Company spokespersons stressed that the cafe model remains an important long-term strategic pillar, but the current focus must be on maximizing efficiency and profitability within the flagship grocery vertical as the company moves towards its goal of an initial public offering (IPO).

Prioritizing Profitability and Core Efficiency

The temporary closure of the cafe outlets signals a clear industry trend where tech startups, previously focused on rapid market share expansion, are now rigorously prioritizing the path to profitability.

The quick commerce sector, known for its high burn rate, requires extremely tight operational controls.

The Zepto Cafe model inherently involves a more complex supply chain (fresh preparation, quality control, specialized packaging) compared to standard grocery logistics.

By pausing this less mature vertical, Zepto effectively frees up capital, management bandwidth, and human resources to concentrate solely on optimizing its primary dark store model, which involves standardized packaging and pre-sorted inventory.

The decision is viewed by industry analysts as a prudent capital allocation move. While the potential for high-margin ready-to-eat sales is significant, achieving it at scale requires substantial investment.

The pause allows Zepto to focus on improving the unit economics of its core business, which generates the vast majority of its revenue and is closer to turning profitable.

The Future of Zepto Cafe

While Zepto has shut down the 200 units for the immediate future, it has indicated that the closure is temporary.

This suggests the company plans to re-evaluate the model and potentially re-launch the cafe operations at a later, more financially stable date.

The successful pilot operations and the market validation of demand occurred for quick-delivered prepared foods.

These factors will inform the next iteration of the Zepto Cafe model.

Zepto will likely execute the future relaunch with a revised operational playbook.

This playbook will incorporate lessons learned about supply chain efficiencies and cost control from this initial large-scale pilot.

This pivot solidifies Zepto’s commitment to achieving sustainable business growth over merely pursuing top-line growth across all verticals.

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