Deliveroo shares fall 2.5% as food delivery firm warns consumers may spend less this year    

Outlook for food delivery firm looks sluggish as inflationary factors hit consumers' disposable income.

A cost-of-living squeeze for consumers is believed will hit food delivery firms like Deliveroo.

Shares in Deliveroo fell 2.5% in London trade as the food delivery firm said consumer spending could slow for the remainder of the year from a high-performing first quarter.

The warning comes amid a cost-of-living squeeze due to higher energy bills and soaring inflation, exacerbated by the Russia-Ukraine crisis.

The quarterly 12% growth in gross transaction value, or GTV, which is the money value of all food orders on its platform, was higher compared to a year earlier, but analysts turned sceptical. 

Britain and Ireland account for nearly 54% of the company's overall GTV.

Volatile year ahead

"For a growth company like Deliveroo, this (quarterly GTV growth) is not a stellar figure. Actually, it is a warning that the rest of the year is going to be quite volatile," said AJ Bell analyst Danni Hewson.

During the peak of the pandemic last year, Deliveroo, which competes with the likes of Just Eat Takeaway, had enjoyed strong orders from people stuck indoors.

"Consumer behaviour may moderate during the year, and this is reflected in our guidance."

 Deliveroo founder and chief executive Will Shu said. "We remain confident in our ability to adapt financially to any further changes in the macroeconomic environment," he said. 

Meanwhile, rival Just Eat said it will partner with a Dutch supermarket operator to deliver groceries.

•  Reuters