Food delivery firm Deliveroo hit the top of its forecast for 60%-70% growth in gross transaction value (GTV) in 2021 after GTV rose by more than a third in the fourth quarter despite a tough yearly comparison when new lockdown restrictions were coming into force.
Food delivery boomed during the COVID-19 pandemic when pubs and restaurants were closed, and the popularity of the platforms has not faded since hospitality reopened.
Deliveroo said that the GTV of orders on its platform rose 36% year-on-year in the fourth quarter, resulting in it hitting the top of its guidance range with a 70% rise for the year.
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The British company said on Thursday January 20 that the number of orders grew 10% in the quarter, and the average value stabilised, up by 1% in constant currency to £21.40.
Deliveroo Founder And Chief Executive Statements
Deliveroo founder and chief Executive Will Shu said that the performance is "really encouraging", although he cautioned that the first quarter of 2022 will be the hardest comparison because many of its markets were in full lockdown in the first three months of 2021.
He said that the average order value of £21.40 in the fourth quarter was down 5% year-on-year, reverting back to pre-COVID-19 levels. However, it was slightly up on the third quarter and the frequency of orders from its 8 million active monthly customers had increased to 3.4 per month, from 3.3 in the third quarter.
"We feel good about the consumer engagement side," he said in an interview.
The company is also not struggling to recruit riders, he said, despite competing opportunities in other sectors because they valued the flexibility on offer.
Market Share Growth
Deliveroo, which competes with the likes of Uber Eats and Just Eat Takeaway, said that it grew market share as it improved its customer offer, including more grocery options, which accounted for 8% of GTV in the second half of 2021.
Shares in Deliveroo, which have lost more than half of their value since listing at 390 pence in March of 2021, were trading up 2.6% at 174 pence on Thursday January 20.
The company, which has yet to make a profit even as demand has boomed, said that it maintained its guidance for gross profit margin as a percentage of GTV at 7.5%-7.75%.
Additional Deliveroo Founder And Chief Executive Statements
Shu said that he will guide on 2022 when the company reports full-year results in March, and he will also talk about the longer-term path to profitability.
"This is a giant market that's still in its infancy," he said. "We're going to invest where we see appropriate, but we have got to do that with increasing levels of efficiency."