Just Eat Takeaway is considering selling off its Grubhub arm after reporting a decline in orders compared with bumper levels during Covid lockdowns.
The online food ordering company said orders dropped by 1% to 264.2m in the first three months of 2022 as it struggled when trying to match the pandemic-boosted levels from a year earlier, when many cafes, restaurants and hospitality venues remained closed for several months.
As a result, the company reduced its transaction value and earnings forecasts for the year. It also warned that it was expecting growth to remain “challenging” between April and June.
The tie-up created the world’s largest food delivery service outside China, and gave Just Eat access to the lucrative food delivery market in the US, adding to its base in some of the world’s other most profitable markets: the UK, the Netherlands and Belgium.
Reporting its results for the first three months of the year, Just Eat said in a statement that it was “actively exploring the introduction of a strategic partner into and/or the partial or full sale of Grubhub”.
Jitse Groen, Just Eat’s chief executive, said: “Our priority for 2022 lies in enhancing profitability and strengthening our business.
“We expect profitability to gradually improve throughout the year, and to return to positive adjusted Ebitda (earnings before interest, tax, depreciation and amortisation) in 2023.”
Groen added that there was no guarantee that talks about the future of Grubhub would lead to a deal.
The announcement comes only weeks after the company revealed a pre-tax loss of more than €1.1bn (£916m) for 2021, after making significant investments, although it said it was “rapidly progressing towards profitability”.
Just Eat said in March when reporting its results that northern Europe was its most profitable region, while it had doubled the number of orders placed by customers in the UK and Ireland over the past two years.
Even though it is best known for its restaurant and fast food delivery, the company has entered the fast grocery delivery market in the UK, the Netherlands and Canada, and said there had been “significant progress” in this area.
After a tie-up with Asda in the UK, Just Eat is giving a trial to a fast delivery service for customers of the Central England Co-op, where shoppers at 10 stores across Cambridgeshire, Leicestershire, Nottinghamshire, Northamptonshire, the West Midlands and Yorkshire can get their groceries brought to their door.
Just Eat followed its rivals Deliveroo and Uber Eats into the grocery delivery market, which already had fast delivery deals with some of the UK’s biggest supermarkets.
Just Eat said it expected to gain some publicity as a result of its global delivery partnership with McDonald’s.