Just Eat Takeaway is patinating after two years of strong growth. The company’s quarterly results, unveiled Wednesday, April 20, are deemed insufficient. What push her to consider the sale of GrubHub, yet acquired only two years ago. The European meal delivery giant is therefore forced to rethink its economic model, which has so far been based on the employment of delivery people on permanent contracts. Several hundred layoffs are planned.
Just Eat Takeaway Considers Selling GrubHub
Almost two years ago, Just Eat Takeaway acquired the American meal delivery company GrubHub, beating Uber to the post and marking a sensational entry into the American market. Only today, the Amsterdam-based company plans to resell GrubHub. In question, disappointing quarterly results. Just Eat Takeaway acquired American meal delivery specialist GrubHub in June 2020 for $7.3 billion, all in stock.
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The sale of its American subsidiary would also be motivated by pressure from investors, who are calling for strategic investments to completely relaunch the company. The company recently explained that “ management is currently actively exploring the introduction of a strategic partner in and/or the partial or full sale of Grubhub “. Some investors, however, were more explicit than others. As early as October 2021, Cat Rock Capital, which owns approximately 6.5% of Just Eat Takeaway, asked the latter to sell the subsidiary and ” refocus its activities on the Old Continent.
The European giant also announced that it had sent bankers to explore possible avenues around the future of the subsidiary.
The end of “two years of exceptional growth”
Just Eat Takeaway’s 2021 results were good though. Like many competitors, the company saw its activity increase sharply during the pandemic. Thus, 20 million new consumers have placed orders since April 2020 and the first confinements. Jitse Groen, CEO of the company, even mentions in the press release ” two years of exceptional growth “. ” Our priority for 2022 is to improve profitability and strengthen our business. We expect profitability to gradually improve throughout the year and return to positive adjusted EBITDA in 2023 “, adds the leader.
Now, the pandemic is receding and the restrictions are gradually disappearing, causing the growth of the delivery sector to slow down. Consumption habits are returning to what they were before the crisis, leading to a decrease in meal orders and deliveries at Just Eat Takeaway.
For this first quarter of 2022, the increase in orders was therefore lower than expected. 264 million orders were placed, while the target was set at 286.5 according to Bloomberg. This is also a decrease of 1% compared to last year. The company also claimed in its results that the amount of gross transaction value (GTV) was €7.2 billion. These figures illustrate the total value of meals ordered and delivered. In this case, it is an increase of 4% compared to 2021. An increase which is explained by a higher average transaction amount.
The delivery men, the first victims
The fact remains that Just Eat Takeaway got a little carried away by the explosion of its activity during the pandemic. Faced with this growth, the company said it wanted to recruit nearly 4,500 delivery people on permanent contracts in France. In total, only 800 to 900 delivery people have been hired. Height of a mixed economic health, a restructuring plan has been announced, leading soon to the layoffs of no less than 269 delivery workers on permanent contracts.
The Just Eat Takeaway model is unique in the world of meal delivery. Many controversies and questions regularly arise on the self-employed status of delivery people on platforms such as Uber Eats or Deliveroo. The European Union is even considering intervening to clarify and improve their rights and status.
The European platform stands out with a model based on the wage earners of the deliverers. Salaried deliverers present so far in 27 French cities, but this model should only last in 7 of them, those where the turnover is the highest. Consequently, only 530 deliverers will a priori be kept by the company, far from the initial ambition…