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Just Eat ramps up own delivery and talks up CX improvements

Online takeaway marketplace Just Eat said on Tuesday it is investing around £50 million into growing its delivery arm, which will result in the company broadening its partnerships with branded restaurant chains.

The business, which typically allows its local independent restaurant partners to make their own deliveries, said developing its own delivery arm provides an £18 billion market opportunity to complement its core marketplace model.

Just Eat said it already runs a profitable delivery business in Denmark, and it has moved into that space in Canada via the recent acquisition of SkipTheDishes. The group employs its own drivers in Denmark, uses couriers in Canada, and works with third parties in other markets, including the UK.

Last year saw Just Eat kick-start several pilot partnerships with big brands, including KFC and Burger King, and this is set to be a greater area of focus in 2018 as it directly takes on the likes of Uber Eats and Deliveroo.

In a joint statement, CEO Peter Plumb and CFO Paul Harrison said: “Whilst delivery-based activity has a different margin profile to our marketplace businesses, our ambition is to offer a hybrid marketplace model, fully aligned to our customer's needs and restaurant partners' commercial requirements - whilst managing the economics of such models with great care.”

The company reported a £103.5 million loss for the 12 months to 31 December despite encouraging revenue, which was up £170.6 million year on year. A pre-tax loss of £76 million was announced, compared with a profit of £91.3 million last year, mainly due to charges incurred at its Australian operations.

Plumb, who recently took the reins from David Buttress, described 2017 as “a record year” for the company. “We helped 21.5 million customers order 172 million takeaways around the world, growing group revenue by 45% to £546 million,” he explained.

“More restaurant partners joined our platform, increasing the breadth of choice for our customers and strengthening the group's geographical coverage to over 82,000 restaurants.”

He added: "As the new CEO, I will be increasing our investment in brand, developing markets and delivery services that will be engineered to complement our thriving marketplace business by bringing more choice to our takeaway-loving customers."

The business also said its order management technology is increasingly viewed by restaurant partners as an “essential tool” for improving customer experience (CX).

Some 78% of UK orders are now processed with the Just Eat OrderPad, which enables partner restaurants to process orders and provide delivery updates to customers. A further 12,900 of these units were rolled out across the company’s estate in 2017, giving restaurants insights into their operational performance, and allowing for more personalised CX.

The OrderPad is expected to be used for additional restaurant services in the future, including negotiated favourable procurement contracts with relevant vendors.

Just Eat announced last week that the chairman of Zoopla parent company ZPL, Mike Evans, will officially take the role of non-executive chairman at the online takeaway marketplace on 26 April.

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