Deliveroo warns rapid growth will slow as rules ease
DELIVEROO has said it expects the recent rapid growth in orders to wane as lockdown measures ease in the coming months.
It comes after the takeaway delivery firm said growth accelerated to 114% in the three months to March, with 71 million orders placed as pandemic restrictions continued to grip its key markets.
The group, which saw its shares flop in its highly-anticipated London float, said its total transaction value (GTV) jumped 130% to £1.65 billion for the quarter compared with £715 million in the same period last year.
Nevertheless, it said it predicts that growth will “decelerate as lockdowns ease” although extent of the slowdown remains “uncertain”.
Recent growth was particularly strong in the UK, where orders grew by 121% year on year in the quarter to 34 million amid the third national lockdown.
However, customers are now able to dine out again after the reopening of outdoor hospitality in England on Monday, with indoor dining due to resume on May 17.
Deliveroo has significantly grown its coverage across the UK and has now reached more than 60% of the UK population, adding some six million people to its potential network of customers. It also reported that its international segment saw order growth of 108% for the quarter, with transaction values rising by 119%.
Founder and chief executive officer Will Shu told the PA news agency said the reopening of hospitality across the UK is likely to have some impact, but highlighted other markets which have already seen restrictions eased.
He said: “We operate in 12 markets which are all at different stages of restrictions, so we’ve been able to keep an eye on people’s behaviours.
“In Hong Kong, all lockdown restrictions have been lifted and people enjoy eating, but there is still really resilient growth.
“The truth is that we don’t know how things will turn out in the UK and how much these new consumer behaviours will stick, but we are really positive.”
The update comes weeks after the group’s dismal float on the London Stock Exchange, which saw the value of its shares cut by a third in a week amid investor concerns over corporate governance and workers’ rights.
On its first day of open trading last week, the company also saw hundreds of couriers protest against their treatment by the business, with demonstrations in London and other cities across the UK.
Mr Shu said: “We are delighted with the Deliveroo first-quarter results.
“Demand has been strong in both the UK and Ireland and international markets, driven by record new consumer growth and sustained engagement from our existing consumers.
“This is our fourth consecutive quarter of accelerating growth, but we are mindful of the uncertain impact of the lifting of Covid-19 restrictions.
“So, while we are confident that our value proposition will continue to attract consumers, restaurants, grocers and riders throughout 2021, we are taking a prudent approach to our full-year guidance.”
In Hong Kong, all lockdown restrictions have been lifted and people enjoy eating, but there is still really resilient growth WILL SHU