Caught up by inflation, Deliveroo widens its losses

L’inflation is catching up with home meal delivery. Worried about their purchasing power, consumers order less. The British Deliveroo paid the price in the first half: the platform widened its net loss by 41% to 153.8 million pounds, despite a turnover up 12% to 1 billion. The wild surge in activity during restaurant closures at the height of the pandemic is a distant memory.

Inflation in food, restaurant like at the supermarket, complicates Deliveroo’s business. “We remain confident in our ability to adapt financially to any potential changes in macroeconomic conditions,” says Will Shu, Managing Director and Founder. In one year, the average basket fell by 3%, to 22.10 pounds. Since January, growth in order volumes has melted (+12% in the first quarter, but only +2% in the second).

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Forced to cut back on marketing and advertising spend, the platform is finding it harder to win new customers and retain old ones. “In 2020 and 2021, growth accelerated with lockdowns in many countries. This unusual frequency of orders has subsided. However, it remains higher than before the Covid”, explains Deliveroo. The group is compensating for the slowdown in orders by increasing the costs charged to restaurateurs and customers.

Created in 2013 in London, the company offers 160,000 restaurants and 16,000 grocery stores and convenience stores on its platform. 12,000 restaurants have been referenced in the last six months.

Departure from the Netherlands

Thanks to partnerships with major retailers (Crossroads, Casino and Auchan in France, Waitrose and Sainsbury’s in the United Kingdom), the shopping offer has expanded. It now weighs 10% of the activity. Merchant on the flowerbeds of gorillas and Getir, Deliveroo offers an “express” service (delivery in less than 30 minutes). After the United Kingdom and Italy, a test is being carried out in France, in two Auchan stores in Lille and Paris. Will Shu’s ambition for Deliveroo has not changed: “Becoming the platform people turn to when they think about food. » The manager cultivates another specificity: opening central kitchens 100% dedicated to delivery. Called Editions, they are made available to restaurateurs, in exchange for commissions on sales. There are about forty. France should soon have seven, with the opening of two new addresses by the end of the year.

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More than ever, this expansion must be done while limiting costs. Listed in London, Deliveroo must prove that its model can become profitable. Since January, the stock has fallen more than 40%. Its leaders promise the first profits at the end of 2023-beginning of 2024. This will be done by making arbitrations. Failing to have established itself in the Netherlands, Deliveroo will leave this market. After six years there, this country represented only 1% of the global activity.