Deliveroo Sees Promise in Groceries as Orders Climb

With order volumes increasing, Deliveroo sees opportunities from its loyalty program and grocery business.

The U.K.-based delivery service on Thursday (Aug. 8) released earnings for the first half of 2024 showing slight upticks in the gross transaction volume (GTV) per order (up 5% in constant currency) and orders themselves (up 2%).

Looking to the second half of the year on a call with analysts, Deliveroo Founder and CEO Will Shu pointed to the promise of the company’s grocery delivery offering.

“We’ve continued to make excellent progress in grocery,” he said, noting that 80% of the company’s grocery orders now come through Deliveroo’s picking app. “We have strong double-digit growth throughout H1. And this growth was broad-based across all markets. We’ve seen grocery reach 14% of group GTV.”

Still, 70% of the company’s customers haven’t tried the grocery delivery service, Shu added, while half of its users have never seen a grocery menu in Deliveroo’s app.

“And when you see that it’s 14% of our business, it’s very clear that this represents a big opportunity,” he said.

In trying to capture a greater share of the grocery delivery market, Deliveroo is joining rivals such as DoorDash and Instacart. As PYMNTS wrote earlier this week, both companies “are finding new ways to insert their technology into consumers’ grocery shopping routines.”

For example, DoorDash last week expanded its partnership with Chase to give customers with Sapphire Reserve DashPass memberships discounts and other benefits, hoping to cement itself as the go-to eGrocery platform for Chase cardholders.

And Instacart, already known for its eGrocery offerings, is aiming to increase its role in consumers’ grocery shopping trips by expanding its presence in physical stores. Earlier this week, the company announced that Aldi South Group is testing its smart shopping cart subsidiary Caper Carts’ technology in Austria.

In addition to its grocery business, Deliveroo’s Shu also discussed the company’s efforts to become a “Plus First” business by 2026, meaning that a majority of orders will come from members of its Deliveroo Plus loyalty program.

While the program lets customers save money on orders, “it’s also great for us,” Shu said.

“Plus customers spend 3x more than non plus customers,” he added. “Their retention is stronger. Plus accounts for 40% of our global order volume.”