Deliveroo sees orders fall further as demand eases
Founder Will Shu said it was a ‘resilient’ performance given the impact of the cost-of-living crisis on consumers.
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Your support makes all the difference.Takeaway delivery firm Deliveroo has reported a further slowdown in orders as demand wanes following the pandemic and amid the cost-of-living crisis.
The London-listed group said UK and Ireland order numbers fell 3% in the first three months of the year, although food price inflation boosted gross transaction value (GTV), which lifted 6%.
UK and Ireland GTV has slowed from growth of 9% in the previous quarter, while the company’s international arm has continued to weigh on its overall group-wide performance.
Its international division saw GTV fall 9% at constant currencies, with order numbers down 15%, leaving overall group GTV down 1%, though revenues lifted 4%.
Co-founder and chief executive Will Shu said it was a “resilient performance, particularly in the context of inflationary pressures and the ongoing cost-of-living crisis, and against a challenging comparison base”.
I’m particularly pleased with our performance in UK and Ireland, reflecting a further improvement in our offering to consumers
“Against this backdrop, I’m particularly pleased with our performance in UK and Ireland, reflecting a further improvement in our offering to consumers,” he added.
Deliveroo – like its rivals – is cutting costs in the face of falling demand following a sales boom during the pandemic as diners returned to pubs and restaurants.
In February, the business revealed plans to cut about 350 roles, predominantly affecting UK-based employees.
Just Eat Takeaway.com has also been slashing costs, last month announcing plans to cut around 1,700 delivery driver jobs and 170 head office roles.
On Wednesday, Just Eat said order numbers dropped by 11% in the UK and Ireland over the first quarter of the year and were down by 14% across the group, but increased its earnings guidance thanks in part to its cost savings.
Giles Thorne, an analyst at Jefferies, said Deliveroo’s first-quarter performance “looks solid when compared with expectations and full-year guidance, and impressive when compared with Just Eat UK’s performance”.
Deliveroo posted a £245.6 million loss for 2022, but this was narrowed sharply from £290.1 million deficit it recorded the previous year.
It is forecasting underlying earnings growth of between £20 million and £50 million over 2023 as it continues to rein in costs to weather the tougher trading, but said this will be weighted towards the second half of the year.
Order GTV growth is expected to be low to mid single digits in constant currency, with growth “improving through the year as we continue to deliver on our plans and the comparison base eases”, according to the group.