Deliveroo looks set to leave the Netherlands, providing further evidence that the food delivery industry could be facing hard times amidst a worsening cost-of-living crisis.
The UK-based food delivery startup says it is in the consultation stage of shutting down its on-demand service in another European market.
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Deliveroo, which slashed its full-year revenue guidance last month, currently operates in 12 other markets outside the UK.
Other markets include Australia, Belgium, France, Hong Kong, Italy, Ireland, Singapore, United Arab Emirates and Kuwait.
The company claimed the Netherlands counts for less than 1% of its gross transaction revenue, despite remaining a popular pick for a convenience-driven treat meal in other territories, TechCrunch reports.
In a half-yearly financial report to investors, Deliveroo wrote: “The company has determined that it would require a disproportionate level of investment, with uncertain returns, to reach and sustain a top tier market position, and therefore has decided to consult on ending its operations in the Netherlands.”
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By GlobalDataThe report stated the company was working towards a potential date for the final day of operations in the Netherlands at the end of November.
A Deliveroo spokesperson tells Verdict: “We have announced our intention to consult on proposals to leave the Netherlands and will shortly commence a process of consultation with relevant stakeholders.
“We are working towards a potential date for the final day of operations towards the end of November.
“This is not a decision we have taken lightly, and we want to thank all of our employees and riders, who will be supported throughout this consultation process.”
Deliveroo’s exit from the Netherlands comes as food-delivery platforms are being severely impacted by rising inflation and a looming recession forcing households to cut costs.
The on-demand food platform reported losing £147m in the first half of the year compared to £95m a year ago.
GlobalData is the parent company of Verdict and its sister publications.
