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Deliveroo sales continue to grow despite cost-of-living crisis

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Deliveroo inches closer to profitability as margins improve on rising value of the food delivery group’s orders

  • The takeaway platform revealed its GTV increased by 8% year-on-year to £1.7bn
  • Demand for takeaways has slowed in 2022 as consumers returned to dining out 
  • Deliveroo expects GTV to grow by 4-8% on a relentless currency basis this yr

Deliveroo has continued to spice up the general value of sales, regardless that weaker economic conditions caused customers to make fewer purchases.

The takeaway platform revealed its gross transaction value increased by 8 per cent year-on-year to £1.7billion within the three months ending September, with growth within the British Isles outpacing international revenues.

Orders declined modestly to 72.8 million, with expansion within the UK and Ireland being offset by sliding demand within the Asia-Pacific region following the loosening of coronavirus restrictions.

Expansion: The takeaway platform revealed its gross transaction value increased by 8 per cent year-on-year to £1.7billion within the three months ending September

Deliveroo also said the autumn in orders reflected the standard slowdown in European markets through the summer months and heightened consumer pressures leading people to reduce on takeaways.

However the monetary value of average orders was up 9 per cent because of restaurants and retailers mountaineering prices in response to growing food and drinks costs and the ‘continued optimisation’ of service fees.

Demand for takeaways has slowed significantly in 2022 as consumers returned to dining out at hospitality venues, having been prevented from doing so during strict lockdown periods.

Within the third quarter of 2021, 7.3 million monthly orders were made on Deliveroo’s platform, an 82 per cent jump on the identical time the previous yr.

Despite a considerable enlargement within the variety of restaurant partner sites and tie-ups with the likes of McDonald’s, pharmacy chain Boots and WH Smith, orders per thirty days were just one per cent greater.

With many countries now expected to fall into recession and inflationary pressures putting a squeeze on disposable incomes, takeaway deliveries look more likely to weaken further in the approaching months. 

Victoria Scholar, the top of investment at Interactive Investor, said: ‘Deliveroo was very much a poster child stock of the stay-at-home pandemic trend in 2020 with supercharged demand for takeaways during lockdowns when restaurants and bars were forced to shut.

‘Nevertheless, the economic reopening and the cost-of-living crisis have dented demand for its non-essential offering.

‘Financial markets have also been unkind to leveraged tech stocks this yr, given the worldwide shift towards higher rates of interest and the tip of the era of low cost money.

On a relentless currency basis, Deliveroo now expects GTV to grow by 4 to eight per cent this yr, which is on the lower end of its previously declared forecast range. 

Notwithstanding this, the business has upgraded its profit outlook to an adjusted underlying earnings margin of minus 1.2 to 1.5 per cent of GTV because of well-controlled marketing and overhead costs and sustained improvement in gross profit margin.

Founder Will Shu said: ‘Throughout 2022, we have now been adapting financially to the operating environment and driving forward on our path to profitability…We proceed to be excited concerning the opportunity ahead and our ability to capitalise on it.’ 

Deliveroo shares closed trading 3.5 per cent up at 84.84p on Friday, although their total market capitalisation has plummeted by greater than £6billion since a disastrous initial public offering in March last yr.

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