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Retail

Deliveroo Slashes Revenue Outlook On Deteriorating UK Economy

By Steve Wynne-Jones
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Deliveroo Slashes Revenue Outlook On Deteriorating UK Economy

Food delivery company Deliveroo has slashed its full-year revenue guidance, blaming a worsening economic outlook as pressures on consumers mount.

The group said its full-year gross transaction value (GTV) growth was now expected to be in the range of 4% to 12% at constant currency levels, compared to previous guidance of 15% to 25%.

Deliveroo said second quarter GTV growth slowed to 2% from 12% in the first quarter.

It said this reflected "the impact of increased consumer headwinds" during the second quarter.

For the first half of the year, gross transaction value totalled £3.56 billion (€4.19 billion), which the company said was a 7% increase year-on-year (+7% at constant currency levels).

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Cost Of Living

Confidence levels among Britain's consumers sank to a record low last month as they struggle with the accelerating cost of living. Wages are failing to keep pace with inflation that hit a more than 40-year high of 9.1% in May and is heading for double digits.

Deliveroo said second quarter growth in orders was 3% year-on-year, while GTV per order fell slightly year on year, as basket sizes were higher during COVID-19 lockdowns for part of the same quarter last year.

The group maintained its margin guidance for the year.

Read More: Deliveroo's Lack Of Profitability Likely To Make Investors Impatient, Says Analyst

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EBITDA Margin Expectations

Deliveroo, which recently appointed a new CFO, continues to expect 2022 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) margin to fall 1.5% to 1.8%, compared with a fall of 2.0% in 2021.

'Management is confident in the company's ability to adapt financially to a rapidly changing macroeconomic environment, through gross margin improvements, more efficient marketing expenditure and tight cost control,' it said.

News by Reuters, edited by ESM – your source for the latest technology news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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