Quarterly orders in the UK and Ireland at Deliveroo topped £1 billion for the first time, as the fast food delivery business hailed strong demand despite the more troubled economic conditions.
Gross transaction value, a measure of the size of total orders, climbed 9% to £1.03 billion in the region despite order numbers remaining largely unchanged, while GTV for the group as a whole was also up 9% to £1.8 billion. Deliveroo said most of the gains were due to price inflation of items ordered.
The firm also boasted of a boost in profitability, with pre-tax earnings ahead of previous forecasts, and expectations of further improvement later in the year.
William S. founder and CEO of Deliveroo said: “I am proud of the team delivering significant improvements in profitability whilst also still delivering growth in a difficult macroeconomic environment.
“I am particularly pleased that we have done so while improving our consumer value proposition, meaningfully increasing the selection of restaurants and grocers available on the platform.”
Alfie Pearce-Higgins, Co-founder of gig work management app Rodeo, said: “After a year in which consumer spending took a hit from the cost-of-living crisis, Deliveroo ended 2022 in a stronger position than many of its competitors.
“Another major pairing with McDonald’s has also hit the ground running. We believe this is already Deliveroo’s second-biggest UK partnership, and may have accounted for more than 5% of UK orders in Q4.”
Last week Deliveroo also said it would cut around 9% of its workforce, or 350 roles, as it struggles to become profitable in a tougher consumer environment that has caused orders to slow.
Founder and chief executive Will Shu said the economic situation was now tougher and the company needed to sharpen focus on profitability after breaking even in the second half of 2022.
“We now face serious and unforeseen economic headwinds,” he said in a company blog on Thursday.
“Quite bluntly, our fixed cost base is too big for our business.”
Economic headwinds and rising interest rates have hit technology companies, leading global firms to shed more than 150,000 workers as they rein in costs to ride out a global downturn.