×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: Financial Markets | Infrastructure | Money | Grubhub | US delivery consolidation | Just Eat

Grubhub to Be Part of US Delivery Consolidation: Just Eat CEO

Grubhub to Be Part of US Delivery Consolidation: Just Eat CEO
(Dreamstime)

Thursday, 21 October 2021 10:02 AM

The chief executive of Just Eat Takeaway.com said Thursday he expects newly acquired Grubhub to eventually be part of a consolidation in the U.S. delivery market, but signaled he is not currently open to selling the business.

"Over time there will inevitably be consolidation in the wider U.S. on-demand delivery market, as various players combine to optimize the last mile," Jitse Groen told investors in a livestreamed presentation.

Company management "expects Grubhub to be involved in this consolidation when it comes and intends to do so from a position of strength."

Asked whether he would consider selling or combining the whole of Grubhub's business, which Takeaway bought for $7.3 billion in June, Groen demurred.

"Grubhub is fresh," he said, but added that "anything that makes Grubhub a stronger player - we'll look at it."

Takeaway's shares are down 25% so far this year, in part due to the company losing market share in U.S. suburbs and after New York City, its biggest and strongest market, imposed a cap on the commission food-delivery companies can charge restaurants.

Investors have called on the company https://www.reuters.com/technology/eat-or-be-eaten-food-delivery-apps-have-knives-out-pandemic-boom-fades-2021-10-20 to address its competitive position in the United States - where Grubhub is pitted against Uber Eats and DoorDash among others - including by considering selling parts of its operations. They also want Takeaway to clarify its strategy on grocery delivery, where it competes strongly with Amazon-backed Deliveroo in Europe.

In a presentation, Takeaway it said it would target Gross Transaction Value growth - a common measure in e-commerce - in the "mid teens" for 2022.

The company repeated its full-year 2021 forecast for an earnings before interest, tax, depreciation and amortization (EBITDA) margin of -1%-1.5% on a gross transaction value of 28 billion-30 billion euros ($32 billion-$35 billion). That translates to an EBITDA loss of 280 million-380 million euros.

For 2022, the company told investors to expect the negative margin to improve to -0.6% to -0.8%, and that it expects a positive margin in "long term" as GTV doubles over the next five years.

Bernstein analysts, who rate Takeaway shares "Outperform," said in a note that the 2022 guidance was lower than expected but "we remain positive about the position of Takeaway in its core markets."

Shares recovered some of their early losses after Groen's remarks and were trading down 0.6% at 71.36 euros at 1253GMT.

© 2021 Thomson/Reuters. All rights reserved.


StreetTalk
The chief executive of Just Eat Takeaway.com said Thursday he expects newly acquired Grubhub to eventually be part of a consolidation in the U.S. delivery market, but signaled he is not currently open to selling the business.
Grubhub, US delivery consolidation, Just Eat
390
2021-02-21
Thursday, 21 October 2021 10:02 AM
Newsmax Media, Inc.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved