UK’s Deliveroo sees expansion into non-food driving growth

British food delivery company Deliveroo (ROO.L) said it was expanding into non-food retail, betting on toys, electronics and other goods to help drive growth, after it reiterated 2023 profit guidance.

The group, which competes with Just Eat Takeaway.com and Uber Eats in markets in Europe, the Middle East and Asia, said it had launched “Deliveroo Shopping” on its app, which will allow customers to buy non-food items, including D.I.Y. products through a partnership with hardware supplier Screwfix.

By expanding into the new categories, Deliveroo, which has 162,000 restaurants and 20,000 grocery sites on its platform and operates a network of delivery riders, will increasingly find itself in competition with its shareholder Amazon.

The US company holds a 14.13 per cent stake.

In the medium term, Deliveroo said it expected its gross value transaction (GTV) to grow by a mid-teens percentage each year, and reiterated its expectation that its earnings margin as a percentage of GTV would come in at over 4 per cent by 2026.

“There continues to be significant headroom for growth,” Deliveroo’s chief executive Will Shu said in a statement ahead of an investor day on Wednesday.

For its 2023 full-year, the company said it continued to expect adjusted core earnings between 60 million and 80 million pounds.