Meal and grocery delivery firm Deliveroo returned to order growth (+2%) in its first quarter after an improved performance from its international operations (+4%) helped offset more subdued trading in the UK (0%).
The group’s overall sales were up 2% on a constant currency basis to £514m, while gross transaction value (GTV) grew 6% to £1.83bn over the three months to 31 March.
Revenue growth was an acceleration from the 1% figure recorded in the previous quarter, with Deliveroo maintaining its guidance for the full year. GTV growth is anticipated to be in the range of 5-9%, while adjusted EBITDA is expected to be between £110m and £130m.
During the first quarter, GTV growth in the UK & Ireland was 6%, a slight slowdown from the 7% rise in the previous quarter. Deliveroo noted that its performance was in the context of a “more stable but still uncertain consumer environment”.
In its International unit, GTV growth accelerated to 6% from 1% previously, with the improvement driven by its operations in France, UAE, Hong Kong, and Italy.
“I am pleased with the start we have made to this year, building on the strong progress in 2023,” said the company’s founder and CEO, Will Shu.
“The team has been relentlessly focussed on delivering service and value for money, helping drive a return to order growth and continued growth in GTV.”
He added: “In UK and Ireland, while the consumer environment remains stable but uncertain, our commitment to offering fair prices and a flawless consumer experience is building strong foundations for the future and will continue to differentiate our business.”
Despite slowing demand in the delivery market, Deliveroo narrowed its losses by £262m to £32m in 2023 as the average amount spent on orders increased amid higher food price inflation.
NAM Implications:
- Q-commerce is about saturation coverage, in densely populated areas…
- As Dean McElwee says: “I consider Q-Commerce to be a geographically constrained order density model. The objective is to get as many orders in a constrained physical area to keep both sellers and riders/delivery folk happy. Even then profitability of the business model is not guaranteed.”
- This is where all home delivery fulfilment services have to end up…
- …or end up.
