Just Eat has just released their results for the six months ended 2019, and it shows that Menulog customers in Australian and New Zealand fell 10% over the first 6 months.
Despite revenue increasing 30% up to £464 million for the entire Just Eat Group, the underlying EBITDA fell 16%, profit before tax fell 98% (!!) and cash generated by operations fell by 15%.
What happened to Menulog Customers?
Menulog Customers in Australia and New Zealand fell 10%. This is probably due to a combination of reasons:
- Increasing competition from UberEats and Deliveroo.
- Poor customer satisfaction with the new Menulog delivery option.
- Restaurants converting customers to ordering direct with either their POS system or FROLO.
Active Customers fell from 2.9 million to 2.6 million.
Orders were down 100,000 to 6.4 million.
Orders per customers were 2.5 for the 6 months.
Menulog now has around 13,000 Restaurant partners.
The average Restaurant only gets 19 orders per week.
The number of Restaurant ‘partners’ increased from 11,200 to 13,000, a 16% increase. Given that orders were down, it means that orders per Restaurant have continued to fall. This is probably most likely caused by the increasing number of Restaurants that are getting their customers to order directly and save.
Revenue increased to £27.3 million. This means that annually, the average Restaurant spends £4,200 per year (This means that the average Restaurant in Australia is paying $7,411 per year in Commission.) When looked at as a part of the profit, it is a huge amount and this is why Restaurants are turning to FROLO or their own POS system in an effort to take orders online.
Revenue is up as Menulog increased the proportion of orders that they are taking and providing the delivery for, with the commission suspected to be around 30-35%.
The accounts stated that orders grew in Q2.
The Just Eat Group figures for the first half showed:
Revenue up 30% to £464.5 million.
Underlying EBITDA down 16% to £72.4 million.
Profit before tax down to £.8 million (down 98% (ouch!))
Adjusted Basic EPS down 36% to 5.7
Basic EPS -.8 (down 115%)
Net cash generated by operations £65.9 million.
What does the falling Menulog customers number mean?
The news of falling Menulog customers could not have come at a worse time with the potential acquisition of Just Eat by Takeaway.com raising questions about the long term viability of Menulog in Australia and New Zealand.
The United Kingdom remains the powerhouse for the group, although even there the uEBITDA fell from 89.4 to 72.5.
We expect that these numbers, not being great by any margin for Just Eat in general and being quite dire for Menulog in particular will mean that the deal is more likely to go through, as the Just Eat activist shareholders will be enboldened by the lack of growth and the magnitude of the issues that are facing Menulog in Australia and New Zealand.
For Restaurants looking to cut the cost of Just Eat or Menulog Commission, take a look at our FROLO system (Free Restaurant OnLine Ordering). It enables Restaurants to take orders online or through their Facebook page with no monthly or per order fees. Not only that, it feeds into the Restaurant CRM system, has it’s own Restaurant Loyalty analysis system and tools to drive customer loyalty. We have customers in Australia, the US and UK who have cut the costs of taking online orders to Zero.
Why is FROLO Free?
This is the number 1 question that we get. A free online ordering system was a big feature request that we got from a lot of customers, so we decided to build one. We give it away as a part of our comittment to the Restaurant industry and just ask that if you need help with your marketing, or your website, you consider our team and what we can do to help you. Apart from that, we have customers who have used FROLO for years and never received an invoice from us. If you’re looking to cut your online commission fees and grow your email marketing database, contact the team, we’d love to hear from you! 🙂