Online food order and delivery service Just Eat saw its UK orders grow by 58% in the fourth quarter of 2020, marking the third consecutive quarter of order growth acceleration.
Shares (JET.L) were down 4.6% on Wednesday at around 8.45am in London.
Delivery orders in the UK grew by 387% in the fourth quarter of 2020 compared to the same period in 2019, as the nation faced tightening coronavirus restrictions.
The company also chose to double its UK workforce compared to the previous year to keep up with demand, including accelerating the roll-out of its enhanced logistical network.
The pandemic has served the takeaway delivery food market well, as coronavirus restrictions meant people turned to delivery apps to replace eating out in restaurants. England, Northern Ireland, Scotland and Wales have all recently introduced further lockdowns amid rising COVID-19 cases, making Just Eat’s short-term outlook remain positive.
“The fourth quarter of 2020 marks our third consecutive quarter of order growth acceleration,” said Jitse Groen, chief executive Just Eat Takeaway.com.
“Our investment programme is very successful and has led to significant market share gains in most of our countries. The progress in the UK is particularly exciting; order growth of 58% and we have increased our Delivery Orders nearly five-fold in the fourth quarter of 2020 compared with the same period in 2019.”
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The business also raised its guidance for the full year of 2020, with management expecting revenue growth of more than 50%, reflecting significant investments in the delivery division of the business in the fourth quarter.
“To capitalise on the strong momentum from our investment programme, we will continue to invest heavily and prioritise market share over adjusted EBITDA,” the company added.
The company has also been investing heavily in its Scoober service, which launched in London. It’s expected to bring on further premium restaurants with its “very short delivery times, excellent service, and much lower delivery fees than its competitors.”
“The announcement that Just Eat intends to hire thousands of new couriers through a combination of its Scoober subsidiary and external staffing agencies is a real statement of intent,” said Dan Thomas, senior analyst at Third Bridge. “The move indicates that the UK is only becoming even more competitive.”
That stiff competition includes Deliveroo and UberEats, which Thomas said have “typically enjoyed more dominant market positions.”
A few factors will determine which business prevails as the market leader as lockdown restrictions continue.
“A key unknown for 2020 will be the scale with which consumers adopt grocery,” said Thomas. “All three platforms will be keen to capitalise on the category’s growth during 2020, especially as grocers have struggled to scale their own delivery capabilities. Another important factor will be the performance of the newly acquired Grubhub business in 2021 and beyond.”
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