Investors have deemed Deliveroo’s new strategy to be very bad news for rival Just Eat (JE.), given how shares in the latter have fallen 8.1% to 781p.

Deliveroo is launching its Marketplace+ platform so that restaurants with their own delivery service can take orders via its app.

These restaurants will also be able to use Deliveroo’s riders if they experience high demand and need some help with delivery.

Up to 5,000 restaurants could join Deliveroo’s new platform, according to reports. These reports suggest it aims to reach 50 new towns and cities with potential 6m new customers up for grabs by the end of 2018.

Earlier this year, Just Eat decided that its online ordering system wasn’t enough to keep the business competitive; it had to also have a delivery network. Plans to invest £50m to help achieve this goal didn’t go down well with the market and prompted a sell-off in the shares.

Shares in the company have subsequently started to recover, albeit reversing back into a downwards trend on the new threat from Deliveroo.

Canaccord Genuity analyst Nigel Parson sees higher complexity, competition, uncertainty and lower earnings margins as Just Eat makes its push to delivery.

The analyst says the company will be competing with established, well-funded and innovation platforms such as UberEats and Amazon Restaurants, as well as Deliveroo.

Investors should expect more colour on Just Eat's planned expansion following its capital markets day on 27 June.


Issue Date: 13 Jun 2018