As economic pressures mount around the world, multinational food delivery companies are struggling. UK based food delivery aggregator Deliverooon the one hand, which operates in 11 markets on three continents, announcement On Wednesday August 10, a plan to close its operations in the Netherlands after the company failed to secure a prominent place in the country.
“Our aim is to achieve a leading position in the markets in which we operate, of course focusing on the right hyperlocal positions,” Deliveroo CEO Will Shu told analysts in a call on Wednesday to discuss. of the company’s 2022 semester. financial results. “In the Netherlands, it is clear that we do not have a strong local position. We’ve also been here for seven years, so I think we’ve had enough time to understand that market.
Deliveroo said the Netherlands accounted for 1% of its group’s gross transaction volume in the first half of 2022 and that “maintaining a leading position in the market would require a disproportionate level of investment with long-term returns term uncertain”. The company plans to wind down operations by the end of November.
Over the past year, there have been many major moves in food delivery around the world, with major players pulling out of key markets. German food delivery group Delivery Hero has announced that its Foodpanda brand is leaving Japan due to growing competition and a lack of drivers to fulfill customer orders as well as its exit from six German cities.
See also: Foodpanda leaves Japan in the face of increased competition
Uber Eats, meanwhile, has closed shop in Brazil. Ultra-fast grocer Jokr, for its part, left the United States, where it had a presence in New York and Boston, to focus on growth in Latin America, and Berlin-based ultra-fast startup Gorillas joined forces. is withdrawn from Italy and Belgium.
Read more: Uber Eats to Shutter in Brazil on March 7
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As food prices rise around the world, it is becoming increasingly difficult for many consumers to justify the cost of ordering delivery when they could pick up their meal from a restaurant or cook their meal at home. home.
Deliveroo, for its part, has seen its sales growth slow both in its home country and even more so in its international markets. Shu noted that this trend “largely reflects” macroeconomic factors in these areas.
Similarly, competitor Uber noted on an earnings call earlier this month that the company’s delivery vertical was facing challenges internationally. Company CEO Dara Khosrowshahi noted that while Uber Eats has done well in the United States, global economic factors have had a negative impact on the company.
“Part of the slowdown in terms of shipment growth is coming from currencies, and it’s in a number of those European markets that we’re also seeing some of our competitors pull back,” he said.
One of the biggest pressures on food delivery is inflation, and Deliveroo’s CFO Adam Miller noted that this challenge is very different in different markets. He explained that the UK sees food and drink prices continuing to rise, while the Bank of France predicts that in the European Union inflation has already peaked and is expected to decline in the future. .
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