In a significant development, Deliveroo, the UK-based food delivery company, has reported its first half-year profit since its inception in 2013. The company’s financial report revealed a £1m profit for the first six months of the year, a stark contrast to the £83m loss it suffered in the same period last year.
This remarkable turnaround can be attributed to Deliveroo’s successful diversification strategy and growing consumer confidence. The company has been focusing on expanding its offerings beyond food delivery, venturing into the grocery and retail sectors.
Deliveroo’s partnerships with major brands such as Holland & Barrett, B&Q, and Toys R Us in the UK and UAE have been instrumental in driving this growth. The overall value of sales and delivery fees across the business witnessed a 6% increase globally and a 7% rise in the UK and Ireland during the first half of 2024.
The grocery business, in particular, exhibited strong growth, while the push into retail deliveries showed promising early progress. Deliveroo’s decision to prioritise areas such as toys, flowers, and homeware was based on consumer demand, showcasing the company’s adaptability to market trends.
Will Shu, the founder and chief executive of Deliveroo, expressed his satisfaction with the company’s performance, stating, “I am pleased with the performance we have achieved this half, which was driven by effective execution of our growth and profitability initiatives. As a result, we reached two major financial milestones: positive free cashflow and positive profit for the period.”
The news of Deliveroo’s profitability sent its shares soaring by 8.6% in morning trading on Wednesday, reaching 138.8p. This comes as a welcome development for the company, which has been striving to rebound after the easing of pandemic lockdowns. The delivery app industry thrived during the Covid outbreak, as consumers increased their spending on takeaways while confined to their homes.
However, surging inflation over the past two years has forced consumers to rein in spending, leading Deliveroo to cut 350 roles earlier this year to compensate for the drop in online orders. Despite the uncertainty in the external environment, Shu remains optimistic about the future, stating, “Looking ahead, while there is continued uncertainty in the external environment, I am encouraged by the inflection we are currently seeing in consumer behaviour in many of our markets.
The Deliveroo platform is more powerful than ever, and we remain responsive to the external environment while continuing to optimise our proposition for consumers, riders and merchants.” As Deliveroo continues to navigate the challenges posed by the evolving market landscape, its successful diversification strategy and ability to adapt to consumer demands position the company for sustained growth and profitability in the future.
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