​Food Delivery Giants Face Off as Customer Loyalty Wavers

The food delivery market faces significant shifts as competition rises and consumer behaviour evolves. Deliveroo and Just Eat, two of the UK’s leading takeaway platforms, have released their third-quarter trading updates, revealing both challenges and opportunities as they strive to maintain market share in a rapidly changing environment.

Deliveroo’s results indicate steady growth, positioning the company for long-term success. The company reported a six per cent increase in Gross Transaction Value (GTV) during the third quarter of 2024, highlighting resilience in the face of rising competition. Deliveroo’s orders grew by two per cent year-on-year,while GTV per order increased by four per cent, contributing to a seven per cent overall GTV growth in the UK and Ireland.

Deliveroo bike on York Street, Dublin by Ian S, CC BY-SA 2.0, via Wikimedia Commons

Chief Executive Will Shu attributed this performance to the company’s strategic progress, particularly in expanding its grocery offerings and loyalty programmes. “We continue to see strategic progress as we enhance our value proposition for consumers,” Shu remarked. Despite the challenges posed by competition, Deliveroo remains optimistic about future growth, especially as its international markets, which were temporarily slowed by events like the Paris Olympics, are expected to recover in the coming quarter.

In contrast, Just Eat Takeaway’s Q3 update presented a more mixed picture. While the company reiterated its full-year guidance, with expectations of GTV growth between two and six per cent, it fell short of projections in the third quarter. Just Eat’s total GTV decreased by three per cent, with notable declines in its largest market, North America, where GTV dropped by 11 per cent. The Southern Europe and Australia division also saw a significant 12 per cent decline in GTV.

However, Just Eat’s performance in the UK and Northern Europe remains more promising, with these regions now accounting for approximately 60 per cent of its total orders. Despite a six per cent drop in order numbers globally, the company has made strides in its strategic pillars, including diversifying its offerings through partnerships in the grocery, pharmacy, and wellness sectors.

Just Eat CEO Jitse Groen expressed confidence in the company’s ability to drive future growth. He noted that operational efficiencies have enabled the company to continue investing in critical areas while maintaining its outlook for the year. Just Eat expects adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) to reach approximately £376 million (€450 million) in 2024.

One of the central challenges facing both companies is the growing lack of customer loyalty. Analyst Albie Amankona of Third Bridge highlighted how consumers, once loyal to a single platform, now often use multiple delivery services. This shift, driven by post-pandemic behaviour changes, has created an increasingly competitive environment. Both Deliveroo and Just Eat have recognised the need to bolster their loyalty programmes to retain returning customers.

As the food delivery sector continues to evolve, the pressure is mounting on these companies to adapt to a cost-conscious consumer base and the intensifying competition. The future of the industry may hinge on its ability to innovate, diversify, and, most importantly, maintain customer loyalty in an era where convenience is king.