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Just Eat delivers 135m orders in six months but heavy promotions hit profits

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Globally, the company said revenues rose 52 per cent to £2.2bn in the first half of 2021 (PA)
Globally, the company said revenues rose 52 per cent to £2.2bn in the first half of 2021 (PA)

The number of orders placed on Just Eat in the UK soared by 58 million in the first six months of 2021 to 135 million compared with a year earlier, the online takeaway platform has revealed.

Households placed orders 3.2 times a month on average – up from 2.5 times a month during the first half of 2020 as the pandemic hit.

But a heavy period of promotions to win over new customers and increase market share took its toll.

Just Eat added more than 90 new brands during the period, including McDonald’s and  Pret a Manger (PA)
Just Eat added more than 90 new brands during the period, including McDonald’s and Pret a Manger (PA)

The company slumped to a €71m euro (£60.6m) underlying pre-tax loss in the UK compared with a €127m (£108m) profit in the same period a year ago.

In London, Just Eat said it also saw a 10 per cent increase in its market share following a major investment programme as the delivery market heated up while restaurants were shut.

More restaurants are also using Just Eat’s own riders, some of whom were recently offered worker status rather than the industry’s preferred gig-economy contracts, to make deliveries rather than their own staff.

Just Eat deliveries jumped 700 per cent during the period and tend to be more profitable to the business, as it can usually charge higher premium for drop-offs by their own couriers rather than just acting as an ordering platform.

The company said: “This significant growth was driven by our investment programme in marketing and delivery, increasing brand visibility and targeting a period of aggressive price leadership and the expansion of restaurant supply.”

It pointed out partnerships with McDonald’s, Greggs, Pret a Manger, Itsu and Chipotle – although some of the deals offered are likely to be loss-making due to high promotions.

Just Eat added more than 90 new brands during the period, including Leon and Le Pain Quotidien, as restaurants and cafes looked to leap on the delivery bandwagon whilst lockdown restrictions saw sites closed.

The company also rolled out deliveries from Costa Coffee and Starbucks leading to more than 58,000 restaurants on the site, up from 50,000 at the start of the year.

In the first six months of 2021, gross transaction value – a popular measure in the sector – increased by 63 per cent year-on-year.

Just Eat said: “This was 13 percentage points below order growth mainly driven by the step change in quick service restaurant (QSR) supply, whose orders typically carry a lower basket value.”

Total revenues in the UK rose 82 per cent to €552m (£471m) in the first half of 2021. The losses were put down to “our continued investments to win online share, including increased restaurant selection, marketing, and our price leadership strategy.”

Globally, the company said revenues rose 52per cent to €2.6bn (£2.2bn) in the first six months of 2021, compared with €1.8bn (£1.5bn) in the first half of 2020.

Underlying pre-tax profits of €205m (£175m) swung to €190m (£162m) underlying pre-tax loss.

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