The food delivery business, and tech companies leading the charge, were hot commodities at the peak of the COVID-19 pandemic as people stayed indoors and turned to apps to fill their bellies with pre-made meals. Now with that trend cooling off, those companies are feeling the chill.
In the latest development, big changes and drama continue to buffet Just Eat Takeaway, one of its big players in the global food delivery business. The company today said its chairman, Adriaan Nühn, is leaving the company effective today as the company pushes to refocus itself; and its COO, Jörg Gerbig, has also stepped away from his role on the management board because he is being investigated for inappropriate behavior -- in the company's words, "possible personal misconduct."
Just Eat Takeaway also confirmed to TechCrunch that it is still exploring divestment options for Grubhub, the U.S. business it paid $7.3 billion to acquire less than a year ago, in June 2021.
"In April we confirmed that management is currently, together with its advisers, actively exploring the introduction of a strategic partnership and/or the sale of Grubhub, in whole or in part," a spokesperson today told TechCrunch. "The process is ongoing and further announcements will be made as and when appropriate. There can be no certainty that any such strategic actions will be agreed or what the timing of such agreements will be."
Just Eat Takeaway announced the two executive changes just ahead of its annual general meeting, where both had been scheduled to be reappointed to their roles.
While the two executive announcements are unrelated to each other, together they contribute to a picture of a company facing a wide set of challenges at the moment.
Partly because the business is under pressure, Just Eat Takeaway was clear to spell out that Gerbig's investigation was "not related to financial or reporting obligations" but the result of a confidential complaint through the company's Speak Up program where employees can report misconduct allegations.
Nühn's departure is, however, directly related to the changing tides of the business and shareholder dissatisfaction with how it's being managed.
"The Chairman’s decision to stand down recognises the concerns raised by our shareholders," it said in a statement. "Their strong support is important to ensure the Company can focus on the challenges and opportunities ahead. We understand and share the concerns that have been raised by our shareholders. We are working hard to address them with proposed actions that management is confident will position Just Eat Takeaway.com for continued success going forward."
The bigger picture for Just Eat Takeaway is that demand in the food delivery business has been wilting, and the rush of startups that raised hundreds of millions of dollars to build their businesses around it, went public on the back of early growth, and then danced when business boomed during the pandemic, are all now feeling the pain.
Just Eat Takeaway is listed on the Amsterdam stock exchange, and its share price has been dropping over the last six months: At the moment it is around €25/share, close to the lower end of its 52-week range (which is €23.59 - 83.56), and well below the company's price when it originally listed. That pressure had already prompted CEO Jitse Groen last month to disclose that the company was eyeing up a plan to either partly divest or entirely sell off its Grubhub business in the U.S.
It is not the only company seeing cooling demand. Transportation giant Uber, which owns Uber Eats, this morning reported its Q1 earnings, where it said that its mobility business (e-hailing of cars and its other ride-based operations) just pipped its delivery business (which includes Uber Eats), at $2.52 billion versus $2.51 billion respectively.
Gross bookings for delivery at Uber are still exceeding those of mobility, at $13.9 billion versus $10.7 billion respectively, but the growth of the segments tells a different story. Mobility's bookings were up 58% over a year ago as more people get comfortable again with less social distancing; delivery was up only 12%.
Just Eat Takeaway and Uber Eats are not alone. DoorDash is due to report its quarterly earnings tomorrow, and those will be coming at a time when it's also seeing lukewarm interest in its stock. DoorDash too has been trading down over the last six months, and its share price as of this writing, at just under $80/share, is also at the low end of its 52-week range ($74.32 - 257.25).
And the picture seems just as challenging in Europe. Deliveroo, which went public in London just over a year ago, is also trading down, and is currently at just over £107/share, also at the low end of its 52-week range (£99.04 - 396.80). Its Q1 earnings, posted in April, showed gross transaction value that, like Uber Eats, grew 12% -- a very far cry from the 133% growth in the same period a year ago.
For Just Eat Takeaway, the executive departures and the news of the Grubhub sale are also a stark contrast compared to the heyday of COVID-19 business. Two years ago -- in the midst of the COVID-19 pandemic -- the company quietly negotiated to buy Grubhub from under the nose of Uber, which itself was also looking to acquire Grubhub as part of a bigger economy of scale play. Uber later picked up Postmates for significantly less money, $2.65 billion all in stock, to fill out its consolidation ambitions.
Now, who knows what the coming months will bring for any of them in terms of consumer demand, whether they will follow through on their promise of making everything more efficient through tech, and, because they are all publicly listed, whether investors keep an appetite as they work through these things.