Food delivery firm reports big market gains in London as customers ordered takeaways more often
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Last modified on Tue 17 Aug 2021 11.45 EDT
Britons’ hunger for takeaways grew even bigger in the first six months of 2021 as lockdown restrictions led to a 76% increase in orders at Just Eat Takeaway.
Consumers stuck at home placed 135m orders which was 58m more than in the equivalent period of last year. The food delivery company said people were eating takeaways more often, with the average customer ordering more than three times a month, compared with 2.5 times in 2020. It had also made big market share gains in London, the company said.
Overall sales at Just Eat Takeaway were up just over 50% at €2.6bn (£2.2bn), but pre-tax losses widened from €26m a year ago to €395m on the back of heavy investment in its own fleet of delivery couriers and expansion into groceries.
The figures sent the shares, which have shed 30% of their value over the past year, up almost 3% on Tuesday to about £63.00. The company has come under fire from one of its largest shareholders, Cat Rock Capital, which thinks it should sell off assets or explore a tie-up with a larger rival to boost it share price.
Just Eat Delivery is Europe’s largest food delivery group, after the Dutch firm Takeaway took over its UK rival Just Eat in a £6.2bn deal a year ago. It also bought US firm Grubhub last June in a £5.8bn deal. Its main rival in the UK is Deliveroo which last week reported more than doubling its orders.
Dan Thomas, an analyst at Third Bridge, said demand seemed to have been “little affected” by the reopening of dine-in restaurants but rising delivery costs and marketing spend had had an impact on the Just Eat Takeaway’s profitability.
The decision to invest in delivery and brand marketing was a “long-term market share play” said Thomas but could spell a profits squeeze especially if delivery volumes cannibalise marketplace orders which are significantly more profitable overall.
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