Just Eat catapults into the FTSE 100 as obsession with takeaways grows
If you’re going to pick up a takeaway on your way home tonight instead of cooking then you’re not alone. We spent about £6.6bn on takeaways in 2015-16, almost a fifth more than in 2009, according to official figures.
This growing obsession with ordering our meals instead of making them has just made online order start-up Just Eat into one of the UK’s biggest firms.
The firm – which only listed on the London Stock Exchange in 2014 – has now been catapulted into the FTSE 100.
The firm takes online orders on behalf of restaurants and then delivers them, charging between 13% and 14% commission on each UK order.
The popularity of its services has seen the firm grow from its humble beginnings in a Danish basement in 2001 into a firm valued at a whopping £5.5bn.
The means it’s worth more than one of the UK’s most popular supermarkets Sainsbury’s.
Its rapid growth has pushed up its share price 43% this year alone, driving its promotion to the top ranks of the UK’s listed firms.
But is its rise because people are just getting too lazy to cook?
Nicholas Hyett, equity analyst at Hargreaves Lansdown, says people just don’t have enough time.
“We live more hectic lives generally, and with the rise of takeaway food, cooking for some has become a pastime rather than a necessity,” he says.
Just Eat’s attraction is that it enables people to try a wider variety of options, he says.
“People used to have a single Indian restaurant’s menu pinned to the kitchen notice board, Just Eat allows them to try any takeaway in town.”
Fast food is definitely on the rise in the UK. According to the latest official figures, in 2009 the average household spent £3.80 on takeaways per week. That rose 19% to £4.70 in 2015-16.
That £4.70 may not sound that much, but it’s a massive £127m per week across the UK in the year to March 2016, or £6.6bn in the whole year. That will buy you a lot of fish and chips.
The growing popularity of smartphones has also played well for Just Eat.
It’s not a coincidence that the firm only got up enough steam to list in 2014, when smartphones were much more prevalent, points out Mr Hyett.
Just Eat has also moved fast to take over competitors.
Earlier this month, the Competition and Markets Authority cleared Just Eat’s £240m takeover of rival Hungryhouse.
So will Just Eat be cracking open the Champagne to celebrate its promotion to the UK’s top ranks?
A spokesperson suggested not, saying it was simply “business as usual”.
The firm itself was quite downbeat about making it into the FTSE 100.
“Just Eat is proud to be a British success story,” he added.