As the company delivered a bumper set of first-half results yesterday, David Buttress, The Times reports that its chief executive had removed “a few hundred” outlets that were proving “detrimental to consumer retention” by being consistently late with orders, delivering the wrong food or refusing to take orders.
He said that the “proactive churning of the worst offenders” was on top of the normal churn rate of about 8 per cent as restaurants dropped out, went bust or otherwise stopped working with Just Eat.
Most were already at the bottom of its consumer review listings, he said. “Now we’re being more robust about the customer experience and proactively removing a few hundred restaurants in the UK, although it’s still small in the context of the more than 20,000 restaurants we have here.”
The revelation came as sales, orders, the number of active users and profits all beat expectations in the first half of the year. Just Eat unveiled a 54 per cent rise in sales to £107.8 million in the six months to the end of June. Underlying earnings rose by 62 per cent to £25.8 million and pre-tax profits from £8.6 million to £14 million.
Orders were up by 52 per cent to 41.9 million, a rise of 47 per cent on a like-for-like basis, with Greek food proving the fastest-growing cuisine in the period amid a popular taste for healthy options.
Britain’s largest takeaway group, which was founded in Denmark in 2001, said that its worldwide customer base had grown to 11 million active users, an increase of 59 per cent.
Just Eat acts as a middleman in the takeaway market, connecting restaurants with consumers who want to order food from one platform. Its network has expanded to 59,000 takeaway restaurants in 12 countries, up from 45,700 at the end of last year.
Mr Buttress attributed much of the growth to its continuing investment in technology and marketing, with a further £8 million earmarked for television advertising and digital and trade marketing by the end of the year. Investment in technology will total £30 million, up from £18 million last year.
Just Eat raised its forecast for full-year revenues from just over £200 million to about £230 million, of which £12 million to £13 million is an organic upgrade and £10 million from the recent £445 million acquisition of Menulog in Australia. Mr Buttress said that further deals were likely.
Shares in Just Eat, which was floated at 260p in April last year, fell by 14½p to 423¼p. They peaked at 523p in May, but have softened on the back of an equity-raising for Menulog and share sales by the company’s quintet of private equity and venture capital backers, who have collected about £500 million.
