18 April 2024 , 07:32
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Deliveroo has reported a dip in UK trading as consumer spending faces 'uncertain' times.
The takeaway titan disclosed that order numbers in the UK and Ireland have hit a plateau at 39.7 million in the first quarter, mirroring the modest 1% increase seen in the previous quarter. The company's gross transaction value (GTV) in the region climbed by 6%, a slight decrease from the 7% growth recorded in the fourth quarter of 2023.
Will Shu, Deliveroo's founder and CEO, commented on the current market conditions, saying the UK and Ireland's consumer climate "remains stable but uncertain". Despite the stagnation in local markets, Deliveroo has managed to achieve an uptick in global order numbers in the first quarter, with a 2% rise following a 3% decline throughout 2023.
On an international scale, the group's GTV saw a 6% boost on a constant currency basis, outperforming the 4% growth in the preceding quarter, driven by stronger results in France, the UAE, and Hong Kong. This surge has contributed to an overall 2% increase in group revenues, reaching £514million in the first quarter, when evaluated on a constant currency basis.
Shu praised his team's efforts, stating: "The team has been relentlessly focused on delivering service and value for money, helping drive a return to order growth and continued growth in GTV."
I ordered a £36 KFC bucket but 27 pieces were missing... I'm raging
The sector is navigating through challenging waters as the demand for delivered meals has significantly receded from the pandemic peak, which saw a spike due to hospitality lockdowns and Covid restrictions. On Wednesday, Just Eat Takeaway.com, a competitor of Deliveroo, reported a larger than anticipated 6% drop in sales for the first quarter.
However, it experienced a more robust performance in the UK and Ireland, with order numbers bouncing back after seven consecutive quarters of decline. In March, Deliveroo group reported a loss of £31.8million for 2023, a significant reduction from the £294.1million loss recorded for 2022.
The company noted a 3% year-on-year decrease in orders to 290 million, but higher food prices helped boost average takeaway spending. Last month, Mr Shu said that the "weight of inflation" was beginning to ease.
He suggested this would be a "positive" for the group after consumer spending on takeaways was squeezed last year due to the cost-of-living crisis. However, the business, which operates in 10 countries and collaborates with over 140,000 riders globally, has witnessed delivery riders striking in recent months over pay and working conditions.