Deliveroo Revenue Climbs Despite UK’s ‘Uncertain Consumer Environment’
Consumer caution in the United Kingdom wasn’t enough to hinder Deliveroo’s fourth-quarter earnings performance.
The online food and delivery company saw upticks in revenue and gross transaction value (GTV), according to a Thursday (Jan. 16) press release.
During an earnings call with analysts, management singled out the U.K., its home base and largest market.
“I think in the U.K., we’re particularly pleased,” founder and CEO Will Shu said on the call. “We saw GTV growth increase to 9% year on year, and that’s contrasting 7% in the third quarter. And I think what’s really great is we’ve seen continued momentum in order growth. So, fourth quarter was 5% up year on year. Q1 was flat.”
He later said that there is “still quite an uncertain consumer environment in the U.K., and so for the team to execute the way they did, we’re proud of that performance.”
Expanding on this later in the call, Shu said the company saw ongoing strong performance from its quick commerce/grocery segment and in retail deliveries.
“And it just seems like there’s … secular shifts happening to faster delivery, smaller baskets versus, you know, what we saw five years ago,” he said. “The food segment is growing nicely as well. But as we’ve said, the grocery segment … is definitely driving significant growth for the overall company.”
Elsewhere, Deliveroo saw slight improvements in France following some disruption caused by the Paris Olympics during the third quarter, although Shu said there was “continued market softness” witnessed by other companies operating there as well.
Other trouble spots included Hong Kong, which Shu described as a “competitive environment … that’s been a drag on growth.”
It’s one of the densest places on earth, in terms of merchants and consumers, he said later in the call.
“And it’s a place that historically has been steeped in convenience culture, right?” he said. “And so, we think it’s a good market because of that. And as we flagged over various earnings calls, it’s been a challenging situation for about a year now.”
The company’s earnings came as other players in the delivery space are struggling. For example, French food delivery startup Epicery announced it was shutting down in December.
Weeks earlier, food delivery giant Just Eat Takeaway sold Grubhub to delivery startup Wonder at a 90% loss.
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