Deliveroo CEO has praised the development of its grocery arm but stressed there was still “a real expansion opportunity” for customers who had not interacted with the division.
Chief executive Will Shu revealed the “majority of consumers” who use the platform to order food “still hadn’t ordered groceries”.
Shu said: “We’ve got a big opportunity just to drive the small baskets. We also have a real expansion opportunity”.
The delivery app confirmed that its grocery arm, which launched in 2018, had reached an annualised run rate of £1bn in the fourth quarter of 2023, with Shu attributing this growth to it making the business “more reliable”.
Shu said: “What did we do? We improved our in-app experience, we’ve made discovery more personalised, we’ve got features like ‘your regulars’ and ‘top picks’ based on your previous ordering behaviour. We’ve made the grocery experience much more reliable.”
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Other features Deliveroo highlighted include its availability API, a dedicated picking app for merchants, and the improvement of substitution features for consumers.
Shu added: “It’s not just what you see on the app, which I think is awesome because it’s a completely separate shopping experience from the restaurant side, but all of the things you don’t see the drives reliability.”
“We also have seen good traction from our grocery top-up feature. This is when you check out of a restaurant, you get the ability to top-up your order with grocery. That’s a way of introducing restaurants users to the grocery, and about a quarter of the viewers who use the top-up feature, were actually new to grocery, which is great.”
Future opportunities for riders
Shu also faced questions about whether the delivery service will really achieve its £1bn run rate following a series of challenges in the first quarter., such as a “well-publicised strikes ” and an increase of the national living wage.
The CEO responded by mentioning new Deliveroo initiatives such as “stacking” – allowing riders to do more deliveries – and other adjustments to be introduced, to allow the company to work through these challenges.
Shu added: “As grocery becomes a bigger part of our business, which it has, we expect to see very good earnings opportunities for riders.”
