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ICICI Securities Report
Blinkit delivery executives servicing ~50% of the dark stores in the National Capital Region area are on strike since April 12, 2023 demanding roll-back of recent changes made to delivery incentive structures in the region, according to media reports.
We estimate Blinkit was operating ~370 dark stores pan-India as of Q3 FY23. This implies ~25% of the dark stores are currently not operational.
Given that at least three-four days' sales have already been lost, this implies ~1% loss in revenue from Blinkit and ~0.15% of consolidated revenue for Q1 FY24 – already.
Why strike? According to media reports, Zomato Ltd. is trying to move from a fixed-fee model of Rs 25/delivery to a hybrid pricing structure of Rs 15/delivery and a supplementary incentive based on distance travelled. Apparently, this is being perceived by delivery executives as a significant cut to their earnings potential.
Why was the tweak needed? We think the change in delivery fee structure indicates Zomato's efforts towards cost control. In our view, this would allow Blinkit to increase the delivery radius for their existing dark stores and thus improve its network coverage with limited capex spends.
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