Online Food Ordering on the Boil in the UK

Deliveroo, M&S moves come as food delivery's popularity heats up

Author: Cliff Annicelli

September 25, 2017

The UK's food delivery market continues to heat up, with a major cash injection for homegrown service Deliveroo and a trial online delivery option launched by upscale grocer Marks & Spencer (M&S).

According to a report by Sky News, Deliveroo is expected to announce £285 million ($385 million) in funding from US investment fund managers Fidelity and T. Rowe Price in a deal that values the London-based startup at around £1.48 billion (nearly $2 billion).

In addition to the UK, Deliveroo offers app-based restaurant delivery services in eight other countries in Europe, plus the United Arab Emirates, Australia and Hong Kong. Reuters, citing venture funding data from Crunchbase, reported that the company has raised $474.6 million since it was founded in 2012.

Deliveroo's revenues rose 611% worldwide to £129 million ($174 million) in 2016, according to Business Insider. That tally is no doubt being helped by a growing appetite for food delivery in the UK, Deliveroo's oldest market. According to data from the NPD Group cited by The Guardian, nearly 600 million food deliveries were made in the UK in 2016, up about 10% from a year earlier.

Apps like Deliveroo’s are likely beneficiaries of this rising demand for food delivery. A June 2017 study by On Device Research of smartphone users in the UK found that food delivery was the second most common product or service category purchased via mobile phone, behind only clothing and footwear.

But brick-and-mortar retailers aren't ceding the food delivery business to digital startups without a fight. Upscale grocer and department store chain M&S is the latest UK retailer to try its hand at digital delivery. The company recently rolled out a pilot program to test the online ordering and delivery of ready-to-eat meals, in addition to traditional grocery items, from one of its London stores.

M&S's test follows its decision earlier this year to allow customers to purchase some party food and gift items online for in-store pickup, ahead of plans to launch a full-fledged online grocery shopping feature sometime this fall.