Deliveroo Shuts Down Australian Business

The U.K. food-delivery app cited poor profit in a competitive market as the reason for the quick exit.

November 17, 2022

ALEXANDRIA, Va.—Deliveroo, a U.K.-based food delivery app, has ceased business in Australia because of poor economic conditions. The company is no longer accepting orders through its app.

"This was a difficult decision and not one we have taken lightly. We want to thank all our employees, consumers, riders and restaurant and grocery partners who have been involved with the Australian operations over the past seven years," Eric French, Deliveroo's chief operating officer, said in a statement. "Our focus is now on making sure our employees, riders and partners are supported throughout this process.”

Deliveroo said the company does not hold a “broad base of strong local positions” within the Australian food-delivery market, which is “highly competitive with four global players.”

“Working with the local Australian leadership, the company has determined that it cannot reach a sustainable and profitable scale in Australia without considerable financial investment, and the expected return on such investment is not commensurate with Deliveroo’s risk/reward thresholds,” Deliveroo said in the statement.

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

According to News.AU, Deliveroo employed about 15,000 riders and drivers and has 12,000 partner restaurants. There were also 120 Deliveroo staff members who were immediately laid off.

This summer, the Wall Street Journal reported that food-delivery apps are facing slow growth, decades-high inflation and a potential economic slowdown.

Apps, such as DoorDash, Uber Eats and Grubhub, were used heavily by consumers during the pandemic, when eateries were closed to inside patrons. But now that the pandemic has waned and rising prices weigh on the American consumer, the question is whether consumers will consider food delivery a luxury or a necessity during an economic downtown.

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, little access to consumer data, difficulties delivering age-restricted products and service and operational issues. Here’s what c-stores are doing to make delivery work for their businesses.

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