International food delivery giant wanted double market shares in Norway last year – now Just Eat is retiring after big losses
Dutch Just Eat is giving up the battle for the Norwegian market for home delivery of restaurant food and is scheduled to withdraw on 1 April.
– This is because the group wants to prioritize investments and resource use in markets where Just Eat is already the market leader, or where they are closer to becoming what is still the case in Norway. The group also wants to focus on where the total potential for delivery of takeaway is greater, says head of Denmark and Norway, Carsten Boldt, in a statement conveyed by the PR agency Apeland.
Listed Just Eat is Europe’s largest player in the supply of restaurant food, with a market value of more than DKK 72 billion. In the Norwegian context, the company is also a nestor in the new niche, but has not grown at nearly the same pace as fresher competitors.
Skifter.nr first announced that Just Eat is withdrawing.
Major investment went on the nose
Where Just Eat in Norway had sales of NOK 40 million in 2020, Foodora and Wolt booked NOK 344 million and NOK 81 million, respectively.
The annual report for the Just Eat group, in which the exit from Norway first became known, states that the company is also leaving Portugal. The total losses for these marked fractures are not in the countryside, but have been a total of 10 million euros measured in a so-called adjusted operating profit (ebitda).
In Norway, Just Eat has had annual million profits in the years up to 2020, when the result before tax ended at minus six million kroner. Last year’s figures have not been made public yet, but are presumably characterized by large investments.
In April last year, the Danish top manager Boldt announced that Just Eat would invest heavily in Norway, and that the company was in the process of further staffing after the hiring of 120 bidders.
– We are in strong growth, and will triple the sales force during a current year. In addition, we have hired our own drivers, which gives us better control over food delivery and improves the level of service, said Boldt.
– High costs and small margins
The goal of the doomed venture was to double market shares by 2021. Competitors Foodora and Wolt are also owned by international giants and do not disclose unaudited financial figures either. The companies have previously revealed to DN that their order growth was 71 and 260 percent respectively last year.
The competitors do not simply celebrate that the Dutch giant has given up.
– First and foremost, it is sad for the employees and partners at Just Eat who are directly affected. But it is also a pity for the industry, says Wolt boss Elisabeth Stenersen.
She believes the competition is healthy for users, restaurants and the industry itself.
– As a start-up, we know that it is a tough mark to operate in with high costs and small margins. Just Eat is the longest-lived food delivery service in Norway as far as we know, and it is highly respected, says Stenersen.
Five times market potential
Foodora is also positive to some competition in an immature market.
– As I see it from Foodora’s side, it means that you lose a player that also contributes to growing the Norwegian market. Fast trading in Norway remains very immature. The market potential is about five times as large as what we and our meetings have achieved so far. Competition with players such as Just Eat contributes to training even more Norwegians in fast trading, so you lose something, says press manager Mads Blybakken.
When Just Eats Boldt announced the Norwegian initiative last year, he pointed out Norwegians’ pizza habits and not creating digital competence as challenges.
– When it comes to digitalisation of the restaurant industry, Norway is still a bit behind Swedish and Danish. Instead, Norwegians doubt the phone as an ordering channel, Boldt said.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We want you to share our stuff using a link that leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For further terms see here.