Deliveroo, Just Eat – Will Inflation Impact Orders

Investors will be keeping a close eye on food delivery services stocks this week, with Just Eat and Deliveroo reporting Q1 trading updates.

Deliveroo was quoted with “buyback potential” at Bernstein and Credit Suisse just over a month ago, as its shares have remained fairly stagnated over the last year. However, Deliveroo shares are up over 17% this year as it attempts to break out of its rut.

In its FY22 results, the group commented on delivering on its path to profitability after achieving positive adjusted EBITDA in H2. Revenue grew 14%, whilst gross transaction value (GTV) increased 14% despite a challenging period of high inflation. As a result, Deliveroo anticipated GTV growth to be low-to-mid single digits, with growth in Q1 to be broadly flat.

  • Deliveroo’s Twitter mentions have remained flat so far this year; however, they have gained over the past three weeks.

As for Just Eat, its shares have fallen 22% so far this year despite a return to full-year positive adjusted EBITDA and a 4% growth in revenue. However, the group reported a decline in total orders as inflation begins to take hold and consumers look to save on non-essential purchases.

Just Eat anticipates 2023 adjusted EBITDA of approximately €225 million, with growth skewed towards the end of the year, given weaker order levels in H2 2022.

Investors will be hoping both firms provide reassurance on orders in Q1. In addition, it will be important to watch the gross transaction value of the orders to assess whether higher interest rates and inflation is impacting consumer spending on food delivery in 2023.

By Jamel Boughedda

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