Deliveroo has slashed its annual sales outlook after revealing waning demand for takeaways as the cost-of-living crisis starts to bite.
The takeaway delivery group said growth in group sales by gross transaction value (GTV) pared back sharply to 2% on a constant currency basis in the second quarter, down from 12% in the previous three months.
It said the group believes this “reflects the impact of increased consumer headwinds”.
In the UK and Ireland, sales growth dropped to 4% from 12% in the first quarter.
Deliveroo said the slowdown will affect sales over the full year, forecasting annual sales growth of between 4% and 12%, down markedly from the previous 15% to 25% guidance.
But it kept its outlook for underlying earnings margins unchanged.
Management is confident in the company’s ability to adapt financially to a rapidly changing macroeconomic environmentDeliveroo
“Management is confident in the company’s ability to adapt financially to a rapidly changing macroeconomic environment, through gross margin improvements, more efficient marketing expenditure and tight cost control,” Deliveroo said.
It marks the latest sign of consumer belt-tightening in the face of rampant rises in the cost of living.
New official figures on Wednesday are set to show UK inflation jumping to 9.3% in June from 9.1% in May, which was already the highest level for more than 40 years.
Households are being hit by soaring energy and fuel bills, with prices also rising across the board for everything from food to clothing.
Deliveroo’s sales woes comes after booming trade during the early stages of the pandemic, when locked-down customers turned to takeaways while hospitality remained shut.
Its latest update also showed that the amount spent per order fell, down “slightly” year on year in a reversal of trends seen during lockdowns.
Over the first half as a whole, it said sales by GTV rose 7% to £3.56 billion.