On-demand grocery now accounts for 11% of Deliveroo’s revenue

On-demand grocery deliveries accounted for 11% of Deliveroo’s revenue in the first half of the financial year, up from 9% a year earlier.

Founded in 2013 by Will Shu and Greg Orlowski for takeaway, the express delivery company now delivers from around 8,000 UK grocery stores and over 10,000 sites in 10 international markets including Europe, the Middle East and Asia. In 2022, its UK and Ireland business launched with Asda and expanded partnerships with Waitrose, Sainsbury’s and the Co-op. It also works with health and beauty retailer Boots, which now delivers from 125 stores via Deliveroo.

In other markets, it continued to establish partnerships with Carrefour in France, Italy and Belgium, Esselunga in Italy and ParknShop in Hong Kong.

The update comes as London-based Deliveroo reported full-year revenue for the period to 31 December 2022 of £1.97bn. This is 13.8% more than last year. It reported a loss of £230.6m, down from £281.8m a year earlier.

Will Shu, founder and chief executive of Deliveroo, said: “Our team has delivered in challenging market conditions, sustained growth and increased share in our key markets. I am very pleased that the company achieved adjusted EBITDA profitability in the second half of last year. This is a significant step towards our sustainable cash generation and we achieved this milestone a year ahead of our guidance by successfully executing our strategy despite the headwinds of the market environment.

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

Improving the food experience

Deliveroo, he says, will “incrementally transform the food experience” as well as expanding the range of food it delivers. Shoppers can exchange items that are no longer available and traders can see where they match in-store prices. In its full-year statement, Deliveroo said it was testing a new selection app designed to “help productivity when labor is a big headache for grocers”.

Delivery-only Hop grocery sites, similar to dark shops, are on the rise, and businesses are experimenting with Hop as a Service — which allows grocers to use Hop’s technology to pick and pack orders on-site with their own employees. Deliveroo riders then deliver within 10 minutes – faster than the company’s standard 30-minute delivery target.

In today’s full-year statement, Deliveroo says: “The model enables grocers of all sizes to offer ultrafast delivery with faster pick times and more accurate inventory monitoring. In 2022, we’re witnessing pressure on the pure-play instant trading industry through funding drying up and player mergers. For us, we’ve always considered Hop to be a service that belongs on a platform with a wider network, because there are cheaper deliveries and customers. We have made significant progress on the success of the Hop model and are confident in its role in the market.”

Deliveroo now operates in 10 markets, leaving Australia and the Netherlands in November 2022, and the majority of its business is food delivery from restaurants, with its partner restaurants growing from 130,000 to 158,000 per year by the end of 2022. earlier. Within a year, it has expanded its dining partners to more than 380.

In 2022, it had an average of 7.4 million customers per month (+6% YoY), who made an average of 3.4 orders per month. However, the average number of customers in the fourth quarter was one percentage point lower than a year ago at 7.4 million, reflecting what the company described as a “difficult macroeconomic environment.”