In a comprehensive trading update, Just Eat Takeaway reported a universal decline in order volumes, emphasising a strategic pivot towards enhancing gross transaction value (GTV).
- Orders fell by 6% globally, severely impacting markets such as Southern Europe and Australia, where declines reached 14%.
- Despite the fall in orders, key markets like the UK and Northern Europe saw slight growth in GTV, representing a potential path to profitability.
- Cost-cutting measures, including reducing the workforce and streamlining operations, are central to the company’s strategy and financial outlook.
- The board maintains its forecast for 2024, expecting constant currency GTV growth of 2-6%, excluding North America.
Just Eat Takeaway has released a trading update revealing a 6% global decrease in order volumes, with Southern Europe and Australia facing the most significant drops of 14%. This decline comes in contrast to a moderate increase in gross transaction value in vital regions such as the UK and Northern Europe, which together account for approximately 60% of the company’s total orders. Such developments highlight a strategic focus on boosting transaction efficiency as a mechanism to stabilise and potentially enhance profitability.
Jitse Groen, CEO of Just Eat Takeaway, commented on the company’s trajectory, noting, “We made good progress across our key strategic pillars, which we believe will drive growth.” Groen highlighted the expansion into new partnerships across sectors including grocery, pharmacy, and wellness as part of the strategy to diversify and strengthen market positions. This approach is supported by operational efficiencies and cost reduction efforts which have facilitated continued investment while adhering to financial projections.
In alignment with these efforts, the company has restructured its delivery model. This restructuring involved reclassifying many employed couriers as independent contractors, resulting in significant job cuts as part of broader cost-reduction initiatives. The firm has also exited certain less profitable markets, such as ending delivery operations in Paris, in an effort to streamline operations and focus resources more effectively.
Despite a slight revenue increase in the UK and Ireland, overall sales suffered due to weaker performance in areas like North America and Southern Europe. The board remains committed to its 2024 guidance, projecting constant currency GTV growth excluding North America within the range of 2% to 6% and estimating an adjusted EBITDA of approximately €450 million.
Market reactions have been mixed, with shares in Just Eat Takeaway dropping around 3% following the announcement. The company has experienced a sixth drop in stock value since the beginning of the year. Meanwhile, competitors in the sector, such as Deliveroo, have marked financial milestones, indicating a highly competitive environment where strategic agility and financial prudence are paramount.
The current strategic direction embraced by Just Eat Takeaway seeks to address order declines through GTV improvements, cost-cutting, and market diversification.
