Deliveroo reports ‘resilient’ first quarter with lfl revenue up 11% and sales up 6% in UK & Ireland, reflecting improved offering to customers: Deliveroo has reported a “resilient” first quarter of 2023, with like-for-like revenue up 11% and sales up 6% in the UK & Ireland, reflecting an improved offering to customers. Revenue was £299m compared to £268m in the first quarter of 2022, while gross transaction value (GTV) sales were £1,017m compared to £956m. Orders were down 3%, from 40.7m in the first quarter of 2022 to 39.6m, but the GTV per order rose 9% from £23.50 to £25.70. The company said its UK & Ireland growth was underpinned by further improvement to the consumer value proposition, including enhanced selection in restaurants and grocery. However, a year-on-year decline in international revenue was driven by more stringent covid-related restrictions in Asian markets in early 2022, which made for a tougher comparison base, and continued market-wide weakness in France. For the group as a whole, revenue was up 4% and gross transaction value sales down 1% year-on-year, with growth improving through the quarter. For the rest of 2023, GTV growth is anticipated to be low- to mid- single digits (in constant currency), with growth improving through the year “as we continue to deliver on our plans and the comparison base eases”. Adjusted Ebitda is expected to be in the range of £20-50m, weighted to the second half. Will Shu, founder and chief executive of Deliveroo, said: “Revenue growth of 4% and broadly flat GTV (both in constant currency) represents a resilient performance, particularly in the context of inflationary pressures and the ongoing cost of living crisis and against a challenging comparison base. Against this backdrop, I'm particularly pleased with our performance in UKI, reflecting a further improvement in our offering to consumers. We remain confident in our ability to deliver on our plans to drive profitable growth and sustainable cash generation.”
Premium subscribers to receive latest Who’s Who of UK Food and Beverage and access to videos from latest Propel Multi-Club Conference tomorrow: Premium subscribers are to receive the latest Who’s Who of UK Food and Beverage and access to the videos from the latest Propel Multi-Club Conference tomorrow (Friday, 21 April). The
Who’s Who of UK Food and Beverage is the first database where full profiles of 667 of the UK’s top food and beverage operators are available in one place. It features more than 174,000 words of content, including 74 updated entries, while 16 new companies have been added. The companies, listed in alphabetical order, will have their most recent results reported as well as broader information around Ebitda, plans and trading style available. The database merges Companies House information, interviews and other public information to provide an easy to reference and exhaustive guide to the sector. Also on Friday, Premium subscribers are to be given exclusive access to the recording and slides from the latest Propel Multi-Club Conference. They will be sent 12 videos at 9am that will include:
AlixPartners managing director Graeme Smith; Karen Turton, founder and chief executive of entrepreneurial learning consultancy Purple Story; and
Sanjeev Sanghera, co-founder of Döner Shack. Premium subscribers also receive access to four other databases: the
Propel Multi-Site Database, produced in association with Virgate; the
New Openings Database; the
Propel Turnover & Profits Blue Book; and the
UK Food and Beverage Franchisor Database. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers.
Email jo.charity@propelinfo.com to upgrade your subscription. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Propel group editor Mark Wingett.
Daily Telegraph – British coffee shop craze grinding to a halt as home brewing gains momentum: The British coffee shop craze is grinding to a halt as home brewing gains momentum, claims a report in the Daily Telegraph. It said while the average high street price of the UK’s favourite coffee, the latte, has risen from £2.67 to £3.25 since 2019, one company said sales of its coffee pod machines rose 127% in 2022 “as a growing number of drinkers seek out a barista experience at home”. “There has been a massive sea change in the type of coffee that people consume at home now compared to what it used to be,” Jeffrey Young, managing director of the coffee expert Allegra, told the newspaper. “We’ve seen the arrival of capsules such as Nespresso and other capsule systems that wasn’t really a thing ten years ago. If you go back two decades ago, instant coffee was the only way to get coffee, or you might have had some fancy coffee in a French press. Now, many homes have an array of different coffee making devices, mocha pots, Italian-style, the filter coffee, the grinders. During the pandemic, people really understood that their daily coffee is just such an important part [of the day], and also [sought out] a better-quality coffee. Some of the kinds of machines that are selling are £4,000, many of them are [as much as] £1,000. There’s also the bravado of having friends around and saying, you know, I’ll make coffee and showing off your barista skills. If they were cutting back, they would not be buying espresso machines and they would be having instant coffee. What we’ve also seen in the UK is a massive rise in the number of specialty roasters across the country that weren’t there ten years ago. Now there are hundreds, so consumers have access to local roasters. They have access online and can even subscribe.” Sales of takeaway coffee rose 11.9% in 2022, according to Allegra, but are still below their level in 2019. Not that this has put budding entrepreneurs off trying, claims The Telegraph. In fact, the number of coffee shop outlets is expected to grow by 1.5% in 2023, according to Future Foodservice data. Rather than losing custom because of high prices, big chains may end up struggling because they cannot stand out from the pack, according to Simon Stenning, hospitality analyst and founder of Future Foodservice. “The defining factor now is more around the food offer than the coffee because pretty much every single coffee shop has got to a good standard of serving coffee,” he told the newspaper. “We all know what a good flat white is, so we’re not seeing many developments in the market. The standard of coffee has reached such a level that McDonald’s is just as good as Costa, and yet it’s a third of the price. So what consumers are choosing on is other factors.” He highlights brands such as Cornish Bakery, Bob & Berts, Soho Coffee Co and Muffin Break, all of which also offer food and are growing at a faster rate than pure coffee shops. “That’s the challenge for some of the big operators that can’t quite get their food offer right. Which is why Costa has gone to M&S, to try and get more credibility,” he added. Meanwhile a new breed of coffee shops is offering high quality but lower prices, such as London chain Blank Street. None of Blank Street’s main coffees breach the £3 mark, owing to its focus on smaller shops where it can employ fewer staff and keep other costs down, according to UK managing director Ignacio Llado. “When you do coffee right and you do retail, it fits exactly this category – it’s a low-cost daily ritual,” he said.
Food and drink prices rose 19.2% in year to March: The Office for National Statistics (ONS) has said the cost of food and drink rose by an average of 19.2% in the year to March, the highest level since the late 1970s. Inflation in the wider economy was 10.1%, which was higher than expected and increases the likelihood that the Bank of England will raise interest rates again next month. The base rate is currently 4.2%. The price rises were recorded despite a fall in wholesale costs, which the ONS said was “yet to be reflected” in shops. The Food and Agriculture Organisation, a UN agency, says global commodity prices are more than 20% down from their peak last year. The British Retail Consortium (BRC), which represents the supermarkets, admitted that “food production costs peaked in October 2022” but said there was a three to nine-month lag before price falls were reflected in shops. The lag is in part explained by the long-term contracts stores use with producers. BRC chief executive Helen Dickinson said she expected “wider inflation will continue to ease” as the UK enters its growing season in the coming months, reports The Times. In the past week, Tesco, Sainsbury’s, Lidl and Aldi have all cut the price of milk.
