Deliveroo closes Australian store

ALEXANDRIA, Va.—Deliveroo, a UK-based food delivery app, has suspended operations in Australia due to poor economic conditions. The company no longer accepts orders through its app.

“This was a difficult decision that we did not take lightly. We would like to thank all of our employees, consumers, drivers and restaurant and food partners who have been involved in Australian operations over the past seven years,” Eric French, Deliveroo’s Chief Operations Officer, said in a statement. “Our focus now is to ensure our employees, drivers and partners are supported throughout this process.”

Deliveroo said the company does not have a “broad base of strong local positions” in Australia’s grocery delivery market, which is “very competitive with four global players”.

“Working with local Australian leadership, the Company has determined that it cannot achieve sustainable and profitable scale in Australia without significant financial investment and that the expected return on such an investment does not meet Deliveroo’s risk-reward thresholds,” Deliveroo said in the statement.

Deliveroo has been placed under voluntary administration by its director in Australia and will shortly cease trading permanently.

According to News.AU, Deliveroo employs about 15,000 riders and drivers and has 12,000 partner restaurants. In addition, 120 Deliveroo employees were immediately laid off.

This summer, The Wall Street Journal reported that grocery delivery apps are facing slow growth, decades of inflation, and a possible economic slowdown.

Apps like DoorDash, Uber Eats, and Grubhub have seen heavy consumer use during the pandemic, when restaurants have been closed to insiders. But now that the pandemic has subsided and rising prices are weighing on the American consumer, the question is whether consumers will view grocery delivery in an economical downtown area as a luxury or a necessity.

According to NACS’ Last Mile Fulfillment in Convenience Retail report, 61% of retailers are satisfied with their third-party delivery partners. Concerns include high fees, low access to consumer data, difficulties in providing age-restricted products and services, and operational issues. Here’s what C-Stores are doing to make delivery work for their business.

Join NACS and convenience retailers in Bangkok February 28-March 2, 2023 to discuss the future of last mile services in Asia at the NACS Convenience Summit Asia. Registration is open.

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