LONDON (Reuters) – British food delivery company Deliveroo on Monday cut its full-year guidance, blaming a worsening financial situation as consumer concerns deepen.

The group said that full-year gross domestic product (GTV) growth is now expected to be between 4% to 12% in constant currency versus the previous guidance of 15% to 25%.

Deliveroo said in the second quarter GTV growth fell to 2% from 12% in the first quarter.

It said this reflected “the impact of strong consumer sentiment” in the second quarter.

Confidence among British consumers fell sharply last month as they grappled with the rising cost of living. Wages are failing to keep pace with inflation, which hit a more than 40-year high of 9.1% in May and is on track to double.

Deliveroo said second quarter growth in orders was 3% year-on-year, while GTV per order was down slightly year-on-year, as basket growth was higher during the COVID-19 shutdown for the same period last year.

The group maintained its mid-year lead.

It continues to expect adjusted 2022 earnings before interest, tax, depreciation and amortization (EBITDA) to fall by 1.5% to 1.8%, compared to a 2.0% fall in 2021.

“Management is confident that the company is able to capitalize on the rapidly changing economic environment, through significant restructuring, effective sales and cost control,” it said.

(Reporting by James Davey; Editing by Kate Holton and Edmund Blair)

Copyright 2022 Thomson Reuters.

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