Deliveroo cuts losses to £31m as founder looks to 'unlocking future growth'

14 March 2024 , 08:43

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Deliveroo chief executive Will Shu said he is proud of what the company has delivered financially (Image: No credit)

Deliveroo, the well-known takeaway giant, has announced it was able to cut its losses in 2023 even though people spent more money on fewer orders due to a "fragile" consumer spending environment.

The group reported a loss of £31.8 million for the year which is a significant improvement from the £294.1 million loss seen in 2022. This was possible because they reduced business costs, such as marketing, and made their delivery network more efficient just as the cost of ordering a takeaway rose.

Staff costs went up by 3% compared with 2022, despite the company letting go of about 350 people, around 9% of its staff, halfway through the year as part of a redundancy programme. But salary inflation increased the wages of remaining employees, the group added.

On the other hand, Deliveroo announced that the number of orders dropped by 3% yearly to 290 million, which echoes the cost-of-living crisis putting a strain on consumer spending, particularly in the first half of the year. However, the annual gross transaction value (GTV), or the total cost of people's food baskets plus delivery and consumer fees, rose by 3% to £7.1 billion.

Besides, the average cost per takeaway order rose 6% from £22.90 to £24.30 which was caused by price inflation and optimising consumer fees last year. Finally, the business experienced slightly better performance in the UK and Ireland where the number of orders increased by 1%, and GTV saw an increase of 8% year-on-year.

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Founder and chief executive officer Will Shu said: "2023 was a good year for Deliveroo and I am proud of what we have delivered financially, operationally and for our consumers. Our focus on service and value for money continues to build consumer trust, which are fundamental to unlocking future growth in this industry."

Deliveroo, present in 10 countries and collaborating with 135,000 riders globally, has faced legal disputes regarding the employment status and rights of its riders. In the UK, the Supreme Court ruled last year that riders are not employees of Deliveroo, and therefore are not workers entitled to trade union rights such as collective bargaining.

Lawrence Matheson