There are two big problems looming over Deliveroo. Households with less money in their pocket are unlikely to casually order in food on a regular basis and, as we have emerged from the pandemic, there are competing demands for any disposable cash they do have.
Undoubtedly there will still be an appetite for ordering food through an easy-to-use platform but fierce competition in a market which also features big names like Just Eat and Uber Eats makes turning a profit hard.
AJ Bell’s Russ Mould said: “There’s no reason for people to be anything other than platform agnostic. It’s very hard to stand out and that means heavy marketing spend to stay front and centre in people’s minds.
“The company is still burning through lots of cash and although it is attempting to signal to the market that the inflexion point, when it starts to deliver meaningful cash flow and profit, is not too far away, a more difficult economic backdrop could stymie its efforts in this regard.”
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