© Reuters. FILE PHOTO: A Deliveroo delivery rider cycles in London, Britain, March 31, 2021. REUTERS/Toby Melville/File Photo
LONDON (Reuters) – Britain’s Deliveroo said it would quit the Netherlands after failing to gain a strong local position, as it reported a larger pretax loss in “challenging market conditions” in the first half.
The food delivery company, which slashed its full-year revenue outlook last month after a sharp slowdown in its second quarter, reported a pretax loss of 147 million pounds ($177 million) in the first half compared to a 95 million pounds loss a year ago.
Deliveroo, which competes with Just Eat Takeaway and Uber (NYSE:) Eats, said the Netherlands accounted for 1% of its gross transaction value (GTV), and a “disproportionate” amount of investment would be needed to improve its market position.
It said it was working towards a potential date for the final day of operations towards the end of November.
The company, which has added McDonald’s (NYSE:) to its platform in Britain, its largest market, cut its full-year GTV growth forecast to 4-12% versus its previous forecast of 15-25% last month.
It said on Wednesday that GTV growth had slowed from 12% in its first-quarter to 2% in its second, “reflecting the impact of increased consumer headwinds”.
Founder and Chief Executive Will Shu said he was committed to delivering profitable growth and reaching the milestone of profitability on the adjusted core earnings level.
“So far in 2022, we have made good progress delivering on our profitability plan, despite increased consumer headwinds and slowing growth during the period,” he said.
“We remain confident in our ability to adapt financially to any further changes in the macroeconomic environment.”
In December 2021, The Amsterdam Appeals Court upheld a ruling that Deliveroo must pay its couriers as employees, rather than as independent contractors as the company had argued.
In June, the Solicitor General advised the Supreme Court to uphold the appeals ruling. A decision is due by year-end.
($1 = 0.8284 pounds)