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Deliveroo says orders have doubled but growth will slow as lockdowns ease

Deliveroo has revealed that order numbers more than doubled over the last year – but warned its rapid growth will slow as lockdowns ease.

The takeaway delivery platform – whose shares slumped on its much-anticipated stock market debut last month – said orders in the first quarter were up by 114% year-on-year.

But the company acknowledged that it was “difficult to say how much of this growth has been driven by the special circumstances of the current lockdown restrictions”.

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Will Shu will initially have 20 votes per share compared to one vote per share for other stakeholders. Pic: Deliveroo
Image: Founder Will Shu said the company was taking a ‘prudent’ approach to its outlook Pic: Deliveroo

It added: “Deliveroo expects the rate of growth to decelerate as lockdowns ease, but the extent of the deceleration remains uncertain.”

Deliveroo said that “pending further information on consumer behaviour post-COVID” it was sticking to guidance on sales and profit margins set out in its stock market prospectus.

The latest trading update showed 71 million orders were made in the first quarter, up from 33 million a year earlier, representing transactions worth a total of £1.65bn – 130% higher.

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In the UK and Ireland, order numbers rose by 121% to 34 million and gross transaction value increased 142% to £852m.

Deliveroo, which competes with the likes of Just Eat Takeaway and Uber Eats, said it had “strengthened its leadership position in London” and was expanding its UK coverage.

Founder and chief executive Will Shu said the company was “delighted” with the results.

Gig economy riders for app-based meal delivery platform Deliveroo demonstrate outside the companies headquarters in London, Wednesday, April 7, 2021. Pic: AP
Image: Riders demonstrated outside the company’s HQ last week Pic: AP

He said: “This is our fourth consecutive quarter of accelerating growth, but we are mindful of the uncertain impact of the lifting of COVID-19 restrictions.

“So while we are confident that our value proposition will continue to attract consumers, restaurants, grocers and riders throughout 2021, we are taking a prudent approach to our full year guidance.”

The business has grown rapidly since being founded by Mr Shu in 2013 and attracted online retail giant Amazon as a key investor.

But it is still not delivering a profit and posted an underlying loss of £223.7m for 2020 despite benefiting from an increased appetite for takeaways with dining out banned or restricted.

The company has more than 117,000 restaurants on its platform globally and works with more than 100,000 riders globally.

Last week it faced strike action from some workers calling for better pay and working conditions, who demonstrated outside its headquarters.

Some of the City’s biggest institutional investors shunned Deliveroo’s market debut over concerns about its working practices and the dual-class share structure which gives Mr Shu greater control.

Its shares flopped by as much as 30% on the first day of trading and Deliveroo was valued at £6.8bn by the time of the latest quarterly update, down from £7.6bn at the time of the initial public offering.

Shares fell another 2% in early trading after the new figures.

They come two days after rival Just Eat Takeaway also posted strong order growth of 79% – including 96% in the UK.