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Having Taken the Cities, Delivery Giant Deliveroo Wants to Move on Britain’s Towns

Deliveroo is expanding to 50 smaller towns and suburban areas following the investment from Amazon

FRANCE-ECONOMY-FOOD-DELIVERY-SERVICE Photo credit should read GERARD JULIEN/AFP/Getty Images

Deliveroo’s ambition to feed as many people in the U.K. appears to know no bounds. Having already opened up in big cities — such as London, Manchester, Liverpool, Brighton, and Bristol — and towns with young people as its core users, Deliveroo is about to launch in 50 smaller towns and suburban areas in the U.K. this year. The delivery company told Eater that family meals are a key battleground in this latest expansion.

This month alone, it will launch its restaurant delivery service in these 10 towns: Banbury, Bracknell, Braintree, Folkestone, Gravesend, Hastings, Maidenhead, Margate, St Helens and Wrexham. The company claims this new push will see it cover half the U.K. population, up from its current 40 percent. It takes Deliveroo’s presence across the country from 200 towns and cities to 250.

The company is now going into less populated areas and stretching the distances where drivers will deliver to, beyond just the centres. It means Deliveroo is a more viable option for suburban families rather than the ‘busy young professionals’ which have been its bread-and-butter customers so far.

It comes on the back of an enormous £450 million funding round with Amazon a key investor in May, giving it the firepower in its battle with JustEat and UberEats. News this week emerged that the Amazon investment has raised alarm with the U.K. competition regulator over concerns that the deal could be a precursor to a takeover, with particular anxiety over what could happen to Deliveroo’s hold over the sector if it took on Amazon’s powerful data and logistics. The investment had already drawn high-profile public criticism from deputy Labour leader Tom Watson, who, shortly after the investment was announced, called the move a “digital dystopia”.

If the deal does go through, the cash pile will go towards funding various cash-intensive new initiatives like the push into smaller towns and suburbs.

These new projects will sit under the newly appointed VP for New Business, Ajay Lakhwani who had previously worked on AmazonFresh and Amazon Prime.

Lakhwani outlined the growth plans and told Eater: “We need money to keep investing in our growth, and keep investing in our strategic initiatives — like Editions,” the so-called proprietary “dark kitchens” run out of strategically positioned shipping containers.

The coming months and years will see Deliveroo use its cash pile to tap into every opportunity where people are eating a meal.

The story for Deliveroo so far has been a steady evolution from its origins in affluent and dense neighbourhoods in London, expanding to the obvious big U.K. cities, then student cities and towns. Around 50 towns and cities were added last summer, including adding outlets which had their own fleet of drivers, pitting it directly against JustEat — a platform once seen as a much more downmarket operator. As recently as May this year, it added another 10 towns including Dudley and Wigan.

Although Deliveroo now operates and is a recognised brand in 14 countries — Hong Kong, Belgium, Australia, and Kuwait to name four; last year the company posted a gross profit of over £64 million — the original U.K. market is still Deliveroo’s biggest earner.

The U.K. ambitions mean updating the original Deliveroo playbook which had been the bedrock of its success to date: a non-negotiable focus on dense urban areas — one of the appeals to Amazon, as a logistics business — where deliveries were possible in no more than 30 minutes from the time an order was made.

This new strategy is something of a departure and will examine the demand and viability of Deliveroo in new areas and continues its trajectory to a much bigger scale.

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