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Morning Briefing for pub, restaurant and food wervice operators

Wed 20th Oct 2021 - Update: Deliveroo and UK cost of living increases dip
Deliveroo reports ‘strong’ third-quarter performance: Deliveroo has reported “strong” performance in the third quarter of 2021 and has increased its full-year guidance for gross transaction value (GTV) growth. The company said GTV growth was up 58% year-on-year in the quarter in constant currency. It said orders were “resilient” despite the full reopening of bars and restaurants, with a modest reduction in average order value. In the UK and Ireland, GTV was £852m in the third quarter, down from £921m in the second quarter, “reflecting typical seasonality”. In the third quarter, year-on-year GTV growth was 56% in constant currency, modestly below order growth of 59% due to a slight decrease in average order value. Compared with 2019, GTV growth in constant currency was 193% in the third quarter of 2021 and order growth was 182%. In International, GTV was £742m in the third quarter, down from £818m in the second quarter “reflecting typical seasonality”. In the third quarter, year-on-year GTV growth was 60% in constant currency, below order growth of 70% due to a decrease in average order value. Compared with 2019, GTV growth in constant currency was 155% in the third quarter of 2021 and order growth was 162%. Deliveroo’s consumer base continued to grow compared with prior years, with an average of 7.5 million monthly active consumers in the third quarter of 2021, up 56% compared with the same period in 2020 and up 142% compared with 2019. Deliveroo reported excellent initial traction from Deliveroo Plus partnership with Amazon Prime. The number of Plus subscribers in UK and Ireland has more than doubled since the partnership launched in mid-September. Full-year GTV growth guidance has increased to 60% to 70% growth versus prior guidance of 50% to 60%. Full-year gross profit margin (as a percentage of GTV): remains unchanged in the range of 7.50% to 7.75%. Will Shu, founder and chief executive of Deliveroo, said: “We have continued to make good progress executing against our strategy, resulting in strong performance in the third quarter. This quarter we have partnered with Amazon to offer their Prime customers in the UK and Ireland access to our Deliveroo Plus subscription programme. We have also successfully launched a new rapid grocery service, Deliveroo Hop, in partnership with Morrisons. These are just two examples of innovations introduced this quarter that are consistently improving our consumer value proposition. While we are mindful of current and potential macroeconomic disruptions and uncertainties, we expect further strong performance in the remainder of the year and we are increasing our full-year GTV growth guidance. We remain excited about the opportunity ahead and our plans to deliver better value to our consumers, help our restaurant and grocery partners to grow, and provide further opportunities for riders.”

Sponsored message – join Fentimans free webinar on macro trends affecting the on-trade in 2022 today at 2pm: Fentimans will host a free webinar on macro trends affecting the on-trade in 2022 today (Wednesday, 20 October) at 2pm. A spokesman said: “The pandemic has taken a heavy and lasting toll on pubs, bars, restaurants and out-of-home drinks brands. With the worst of the turmoil from the last 18 months hopefully behind us, we can now look forward to a much brighter 12 months. This exclusive webinar will be the first of a two-part series presenting key themes laid out in the recent Fentimans Market Report 2022 – the third annual review of key trends and developments in the premium soft drinks and mixers market in the UK. During the sessions Fentimans and CGA will delve into the latest insights from consumers and business leaders; present exclusive data from across the sector; and forecast some of the next macro trends and evolutions in soft drinks and mixers.” Facilitating the discussion is guest chair Charlie Mitchell, research and insight director at CGA, who will be joined by Neil Donachie, out-of-home marketing manager for Fentimans, and CGA client director Dave Lancaster. To register, click here. If you have a sponsored story you would like to feature, email

UK cost of living increases dip in September: Price rises dipped slightly in September as the economy continued to reopen, according to official figures. The increase in the cost of living, as measured by the Consumer Prices Index, fell to 3.1% in the year to September, down from 3.2% in August. Higher prices for transport were the biggest contributor to price rises. It comes after the Bank of England warned it “will have to act” over rising inflation, suggesting interest rates may rise soon. The Office for National Statistics (ONS) said the inflation rate fell back slightly last month because higher prices in restaurants and cafes in August were largely down with comparisons with August of 2020, when the Eat Out To Help Out Scheme was running. Under the scheme, diners got a state-backed 50% discount on meals up to £10 each on Mondays, Tuesdays and Wednesdays. Mike Hardie, head of prices at the ONS, said: “However, this was partially offset by most other categories, including price rises for furniture and household goods and food prices falling more slowly than this time last year. The costs of goods produced by factories rose again, with metals and machinery showing a notable price rise. Road freight costs for UK businesses also continued to rise across the summer.”

Hammerson – footfall now stands at circa 15% to 20% below 2019 levels: Landlord Hammerson, which owns the likes of the Bullring and Grand Central in Birmingham, and Bicester Village, Oxfordshire, has said footfall across its shopping centres now stands at circa 15% to 20% below 2019 levels. It said some centres in the UK exceeded 2019 comparable levels around the key August bank holiday weekend and have continued to perform strongly since. The business said the trend of high conversion rates and larger basket sizes has continued, with UK sales in its destinations in line with 2019 in August and September, and about 4% lower in France. The company also said rent collection rates have improved with 70% of group billable rent collected for the fourth quarter to date, significantly ahead of any quarter since the first quarter of 2020 at the same point in time. As with the third quarter, the UK continues to be the strongest performer, with 74% of rent collected, Ireland stands at 71%, with France at 65%. FY2020 collections now stand at 94% and FY2021 year-to-date at 78%. The company said: “We remain focused on collecting arrears. We do not anticipate granting future concessions and all avenues to collect rents due are being pursued.”

Vaccine passport app in Scotland updated with businesses told to download new version: The app used to read vaccine passports in Scotland has been updated, with businesses being urged to download the new version. It will now show a green tick when a person’s details have been correctly scanned and they are allowed entry into large events or nightclubs. The change comes in the days after the scheme became enforceable. A further update to the consumer app, which will present a QR code to venues as opposed to the dates of both vaccinations, will also be released from noon on Thursday (21 October), health secretary Humza Yousaf said. This change is set to occur after concerns have been raised about the amount of medical data shown to gain entry. Current versions of the smartphone app will stop working from next week, forcing users to download the update to continue to access events. Yousaf said: “The app is now working well after being introduced more than two weeks ago and updates are an important feature of this kind of technology to ensure it continues to run smoothly.” Yousaf also praised the hospitality sector for its implementation of the scheme, saying: “I understand the night-time industry has made major adjustments for the introduction of this scheme and other measures, but the sector has complied extraordinarily well with the regulations so far. This is a very limited scheme and we hope this will allow businesses to remain open and prevent any further restrictions as we head into autumn and winter.”

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