Just Eat delivers 135m orders in six months but heavy promotions hit profits
The online delivery platform saw UK households place 3.2 orders a month on average – up from 2.5 a year ago.
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Your support makes all the difference.The number of orders placed on Just Eat in the UK soared by 58 million in the first six months of 2021 to 135 million compared with a year earlier, the online takeaway platform has revealed.
Households placed orders 3.2 times a month on average – up from 2.5 times a month during the first half of 2020 as the pandemic hit.
But a heavy period of promotions to win over new customers and increase market share took its toll.
The company slumped to a 71 million euro (£60.6 million) underlying pre-tax loss in the UK compared with a 127 million euro (£108 million) profit in the same period a year ago.
In London, Just Eat said it also saw a 10% increase in its market share following a major investment programme as the delivery market heated up while restaurants were shut.
More restaurants are also using Just Eat’s own riders, some of whom were recently offered worker status rather than the industry’s preferred gig-economy contracts, to make deliveries rather than their own staff.
Just Eat deliveries jumped 700% during the period and tend to be more profitable to the business, as it can usually charge higher premium for drop-offs by their own couriers rather than just acting as an ordering platform.
The company said: “This significant growth was driven by our investment programme in marketing and delivery, increasing brand visibility and targeting a period of aggressive price leadership and the expansion of restaurant supply.”
It pointed out partnerships with McDonald’s, Greggs, Pret A Manger, Itsu and Chipotle – although some of the deals offered are likely to be loss-making due to high promotions.
Just Eat added more than 90 new brands during the period, including Leon and Le Pain Quotidien, as restaurants and cafes looked to leap on the delivery bandwagon whilst lockdown restrictions saw sites closed.
The company also rolled out deliveries from Costa Coffee and Starbucks leading to more than 58,000 restaurants on the site, up from 50,000 at the start of the year.
In the first six months of 2021, gross transaction value – a popular measure in the sector – increased by 63% year-on-year.
Just Eat said: “This was 13 percentage points below order growth mainly driven by the step change in quick service restaurant (QSR) supply, whose orders typically carry a lower basket value.”
Total revenues in the UK rose 82% to €552 million (£471 million) in the first half of 2021. The losses were put down to “our continued investments to win online share, including increased restaurant selection, marketing, and our price leadership strategy.”
Globally, the company said revenues rose 52% to 2.6 billion euros (£2.2 billion) in the first six months of 2021, compared with 1.8 billion euros (£1.5 billion) in the first half of 2020.
Underlying pre-tax profits of 205 million euros (£174 million) swung to a 190 million euro (£162 million) underlying pre-tax loss.