EUROPEAN FOOD DELIVERY: 'FAST AND FURIOUS' GROWTH SET UP FOR PROFITABILITY (1100 EDT/1500 GMT)
The European food delivery industry is near an inflection point with a path set for profitability, rationalized competition, and potential growth, says Bernstein.
"Over the last two years, the European food delivery industry has gone from a fast-growing, highly competitive state of war with the peak excesses of free capital, to a rational race toward profitability and the spoils of war," Bernstein wrote in a note.
Looking at specific companies, German online takeaway food company Delivery Hero raised its full-year revenue outlook last month, while Britain's Deliveroo lifted its annual earnings guidance.
Europe's biggest meal delivery company Just Eat Takeaway.com swung to a better-than-expected core profit in the first half of the year.
Food deliveries boomed during pandemic lockdowns but firms are now cutting costs and improving business efficiencies to boost profits as cash-strapped consumers rein in spending on non-essential items.
The global food delivery industry adjusted earnings before interest, tax, depreciation and amortization (EBITDA) is expected to be about $3 billion in 2023, shifting from annual losses of almost $1 billion in 2019-21, the brokerage estimates.
Bernstein also says the long-term growth story is intact as the global food delivery's total addressable market (TAM) stood at $1 trillion in 2021, but food delivery platforms captured only 30% of that, leaving plenty of room for growth.
However, Bernstein says the food delivery market has not consolidated so there could be large-scale consolidation in Europe, Asia, and South America over the next few years.
(Siddarth S)