Food delivery giant Deliveroo has hiked its full-year earnings expectations despite seeing order numbers shrink further as consumers continue to face cost-of-living pressures.
The London-listed multinational business said it is rolling out more options for consumers and has cut costs which is helping it become more profitable.
But order numbers have been gradually falling back as people cut back on non-essential spending amid rampant inflation.
Orders declined a further 6% over the past half-year, Deliveroo revealed.
“Starting last year, high food price inflation in many markets has put pressure on consumer spending power and affected demand for food delivery,” the company said.
But gross transaction value (GTV) – which means the total cost of people’s food baskets plus delivery fees – per order jumped by a 10th to £24.20 from £22.10 amid price inflation.
Deliveroo does not set menu prices for the restaurants on its platform, but it does set delivery fees based on how long or difficult the journey will be for the rider.
Deliveroo riders have protested over working conditions and pay this year.
Plans to cut some 350 jobs were announced in February, and the firm said on Thursday that the benefits of reducing staff had been “realised slightly earlier than projected” as it shed about 9% of roles across the business.
The company minimised its losses over the period, nearly halving from £154m to £83m, and revenues edged up to surpass £1bn.
It said a stronger half-year performance and investment in more value options for consumers allowed it to hike its 2023 adjusted earnings guidance to between £60m and £80m, up from a previous £20m to £50m forecast.
It also revealed plans to return an extra £250m to shareholders.
In the UK and Ireland, orders dipped by just 1% and GTV per order grew by 8%. Deliveroo said the stronger performance reflects progress made during the period to improve service, such as minimising missing items and late orders.
It also rolled out new features including “premium” delivery, where people can pay to have their order prioritised, and the option to top-up a restaurant order with groceries. Some 8,000 grocery shops are listed on the platform.
Will Shu, Deliveroo’s founder and chief executive, said: “I am very pleased with our progress so far this year. We have delivered a strong financial performance despite challenging macroeconomic conditions.
“This has been achieved alongside continued improvements to our proposition for consumers, riders and merchants.
“We remain excited about the number of opportunities we have to drive further growth in the medium and longer-term, and we have the team and resources to capture these opportunities.”
Shares in Deliveroo were up by more than 3% on Thursday morning.