Just Eat is expanding after striking up a deal with competitor hungryhouse, as the takeaway service looks to buy its rival for a mammoth £200 million.
The company is also seeking to acquire Canada’s SkipTheDishes for £66 million as part of its international expansion, while the hungryhouse deal could be bumped up by another £40 million depending upon performance. While the hungryhouse acquisition is only expected to drive in another £15 million in revenue, the move would effectively mean that Just Eat had swallowed some of its competition, reducing the market while simultaneously increasing its own presence.
Just Eat currently serves over 16 million customers in 13 countries, with its annual revenue coming in at £248 million with a pre-tax profit of £35 million, according to Sky News. However, growing competition from the likes of UberEATS and Deliveroo means that it is losing its stranglehold on the market, leading to potential headaches further down the road.
Just Eat offers menus to over 60,000 restaurants, providing easy online access and payment for customers while taking in a small percentage of the total cost. UberEATS and Deliveroo offer a similar service, though allow customers to choose from restaurants that don’t typically offer a takeaway service, with dedicated drivers/cyclists for both companies instead picking up an order and personally delivering it to the customer.
David Buttress, Just Eat’s chief executive, spoke of the importance of the company’s UK expansion, saying: “The UK has long been an engine of growth for Just Eat. While we have significantly expanded internationally in recent years, we have remained focused on building a high growth, sustainably profitable business domestically. Through this transaction, we would extend our market presence in the UK and sustain high levels of growth given the considerable opportunity in this market.”
Just Eat enjoyed tremendous growth in 2016, with it reporting a 59% increase in revenues across the first six months of the year. This deal is widely expected to cause the company’s stock value to increase.
