Deliveroo has slashed its forecasts as the cost-of-living crisis starts to pinch consumers’ wallets.
The food delivery platform cited “increased consumer headwinds” for the downgrade, as consumers spend less on non-essential services such as takeaways.
Deliveroo said growth for its full-year gross transaction value (GTV) – a measure of the orders placed through its platform – would be between 4% and 12% on a constant currency basis, more than halving its previous estimate of between 15% and 25%.
The company’s 190,000 couriers operate across 11 markets globally.
Compared to the same quarter in 2021, the outlook looks grim for the company, however it said those figures were buoyed by consumers ordering food due to the pandemic-related restrictions.
According to Takealytics, the average cost of a takeaway has risen 8% since the beginning of the year.
“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,” Deliveroo wrote in a statement.
Growth slowed to 2% in Q1, compared with 12% in the same period last year, with adjusted earnings before interest, tax, depreciation and amortization (EBTIDA) dropping between 1.5% and 1.8%, compared with 2% last year.
The company has struggled since its disastrous IPO in 2021 when £2 billion was wiped off its market value on the first day of trading.
Market valuation is down almost 60% this year.
Deliveroo’s rival Just Eat Takeaway.com has also endured a tough few months, losing more than half its market capitalization this year.
Uber Eats, on the other hand, has finally turned profitable after launching in 2014, according to the company’s preferred adjusted measure, which leaves out several costs, including interest, taxes, depreciation and amortization.
