Deliveroo Looks Past Food Following First-Ever Profit

Deliveroo has logged its first-ever profit as it continues pushing past its restaurant roots.

The British company on Thursday (March 14) announced earnings of 85 million pounds ($109 million) for 2023, following a loss of 45 million pounds the prior year.

“Our focus on service and value for money continues to build consumer trust, which are fundamental to unlocking future growth in this industry,” founder and CEO Will Shu said in a news release.

“Alongside this, our restaurant and grocery businesses are performing well, we launched our retail offering, Deliveroo Shopping, and we are scaling our advertising business. Building on the strong progress we made in 2023, I’m excited about the further opportunities ahead.”

The company launched Deliveroo Shopping in November, with the service letting customers order retail items such as electronics and toys. Deliveroo had indicated plans to expand into other categories, such as pharmacy, home care and pet care.

Deliveroo says it also sees “strong levers for profitability and cash flow,” such as reducing rider wait time and smarter order stacking, greater marketing efficiency and increased automation.

“In every one of our key markets we either gained or held market share in 2023,” Shu said in an interview with Bloomberg News, adding that the company expects to be cash-flow positive this year after being “on the brink of break-even in 2023.”

The news comes weeks after German delivery platform Delivery Hero sold its entire stake in Deliveroo for $97 million, having first purchased shares in the company in 2021.

“At the time, food delivery companies were riding high, as the pandemic drove people away from dining in restaurants,” PYMNTS wrote in January.

“Since then, many companies have struggled as food inflation and other economic challenges have kept diners from ordering meals.”

Consumers are, however, shopping online. PYMNTS Intelligence data shows that while 63% of shoppers made most of their common grocery item purchases in stores in early 2020, this figure has fallen to 44%, as digital gains a wider embrace.

Additional joint research done by PYMNTS and Amazon Web Services (AWS) found that the average order for grocery purchases online came to $116, compared to in-store purchases of about $88.

As to why people are turning to digital channels, 62% of grocery shoppers who make purchases online rather than in stores said convenience was a significant factor. And 54% mentioned high prices or the lack of benefits and deals as fueling their switch to digital alternatives.