Deliveroo has posted widened pre-tax losses after seeing cash-strapped consumers cut back on takeaways as it revealed Next boss Lord Simon Wolfson had quit its board.
The food delivery giant posted a pre-tax loss of £147.3 million for the first half of 2022, against losses of £95.4 million a year earlier, just weeks after slashing its annual outlook on the back of slumping sales growth.
In another blow for the group, Deliveroo said non-executive director Lord Wolfson, who is chief executive of high street chain Next, had stepped down from its board on Tuesday just 18 months after taking on the role.
Lord Wolfson, who had joined the group’s board in the run up to its stock market listing, said: “After much consideration, and with regret, I believe that the time required to continue in my role at Deliveroo is no longer compatible with my executive and other commitments.”
Deliveroo also announced plans to pull out of the Netherlands, which it said accounted for just 1% of sales by gross transaction value (GTV).
Deliveroo’s results showed growth in GTV sales pared back sharply to 2% on a constant currency basis in the second quarter, down from 12% in the previous three months as the cost-of-living crisis starts to hit demand for takeaways.
Despite this, it notched up half-year revenues of more than £1 billion for the first time, with turnover 12% higher year-on-year.
But last month it downgraded its guidance as it said the slowdown will affect sales over the full year, forecasting annual sales growth of between 4% and 12%, down markedly from the previous 15% to 25% guidance.
Will Shu, founder and chief executive of Deliveroo, said: “We have made good progress delivering on our profitability plan despite increased consumer headwinds and slowing growth during the period.
“We are confident that in the second half of 2022 and beyond we will see further gains from actions already taken, as well as benefits from new initiatives.”
Joshua Warner, market analyst at City Index, said: “Demand softened in the second quarter compared to the first as consumers became more cost-conscious in the inflationary environment, although Deliveroo said it has continued to gain market share in core markets like the UK, France and Italy and reiterated its full year ambitions.”
He said the plans to quit the Netherlands “will help Deliveroo as it strives to become profitable at the adjusted underlying earnings level over the coming years”.