Deliveroo cuts growth targets as cost of living hits spending

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eliveroo has slashed its growth target for 2022 as it warned cost of living pressures would hit customer spending.

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The company cut back full-year growth from 15-25% to 4-12%, as the value of customer orders fell year-on-year.

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Total transactions for the first half of 2022 hit £3.56 billion, up 7% on the previous year. Growth in the second quarter dropped to 2%, while international second-quarter growth was just 1%.

The company said the growth slowdown “reflects the impact of increased consumer headwinds,” adding spending per order was lower than the same period in 2021 during lockdowns.

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Susannah Streeter, senior analyst at Hargreaves Lansdown, said: “With consumers in the UK showing signs of tightening the purse strings and being increasingly cost conscious, it’s little surprise that Deliveroo has dramatically cut its forecasts for gross transactional value this year.

“Expensive takeaways are likely to be among the first treats to fall by the wayside as households grapple with souring bills especially as higher costs are feeding through to pricier menus.

“Tighter cost control is now set to be the focus for the company as it deals with the headwinds, with marketing budgets set to be reined in.”

It comes as consumers drop takeaway orders in favor of outdoor activities as brits embrace the summer heat.

Consumer trends data from London-based fintech firm Revolut shows spending on meal deliveries fell 7% last week compared to the same period in June, while spending on amusement parks is up 39% and spending on sports clubs is up 52%.

Last week, Tesco predicted sales of ice creams and lollies would reach a record high, while sales of packs of BBQ meat were set to hit 900,000.

Deliveroo shares fell 2.6% in early trading to 85p. The stock is down almost 60% since the start of the year.

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Credit: www.standard.co.uk /

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