Deliveroo cuts losses as it cuts costs

Deliveroo hopes to improve basic income this year although high inflation and competition could make for a bumpy ride

Deliveroo hopes to improve basic income this year although high inflation and competition could make for a bumpy ride.

Deliveroo reduced its net loss last year thanks to cost-cutting, while revenue rose on higher prices amid soaring global inflation, the international food delivery app said on Thursday.

Post-tax losses fell 11% to £294 million ($355 million) compared with 2021, the British company said in a statement.

Revenue rose 14% to nearly £2 billion, despite the easing of COVID restrictions and controversy over the treatment of riders.

Average order value rose 11% to £23.9 at the end of the year, despite austerity by customers due to the cost of living crisis.

The app giant forecasts basic earnings growth this year after hitting it market share in the UK, France and Italy.

Under major rationalization, Deliveroo has left Australia and the Netherlands in 2022, after leaving Spain the previous year.

But the company expanded into Qatar last year as it pursued growth in the Middle East.

“Our team delivered in tough market conditions,” said CEO Will Shu, who founded the company ten years ago.

“The macroeconomic outlook for next year remains uncertain, but our performance over the past 12 months makes me optimistic about our ability to adapt and continue to deliver on our profitable growth-promoting plans.” I.”

Last month Deliveroo cut about 350 jobs, or nearly a tenth of its non-driver workforce.

The group has experienced increased demand during the COVID pandemic from customers affected by the blockade, also thousands of self-employed passengers.

Following Thursday’s update, Deliveroo shares fell 1.8 percent to 87.9 pence on the London Stock Exchange.

Victoria Scholar, head of investment at Interactive Investor, notes: “When household budgets are tight, non-essential expenses like grocery delivery or takeout can be a liability. spend first, putting pressure on Deliveroo after the service became popular during the pandemic.” .

“On top of that, Deliveroo faces fierce competition in this space from Uber Eats, Just Eat Takeaway, and q commercial players like Gopuff.”

© 2023 AFP

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