After just seven years, the food delivery service, Deliveroo, withdraws from Australia due to harsh economic conditions. The UK-based delivery aggregator has faced most of the challenges in hospitality since the pandemic, including rising costs, labour shortages, and restricting work regulations.
Deliveroo’s exit from Australia is a significant move for the business following inflationary pressures and changes in the food service industry.
“Customer demand has fallen,” stated Hannah Cleland, Foodservice Analyst at GlobalData, revealing from GlobalData’s 2022 Q3 that 64 percent of consumers worldwide order food and drink from delivery services at least once a month. Cleland explained that consumers would likely continue seeking the occasional convenience food despite tight budgets.
“However, consumers will increasingly look for the most cost-effective way to do this. At the surface level, techniques such as opting for collection or pick-up and ordering directly from the brand (where there are no additional third-party fees) put delivery aggregators in a difficult position.”
With these challenges, finding a more sustainable and modern approach to food delivery services could be a solution. Cleland offered ideas like introducing cyclist couriers to help alleviate fuel cost pressures or drone delivery to tackle labour shortages.
“Delivery aggregators disrupted the industry to provide a convenient modern solution for businesses and consumers, so it seems likely that their continued survival will hinge on keeping up with modern delivery trends.”
Cleland emphasised the need for the food service sector to increase ESG and technology investments if the industry is going to survive.