Shares in Just Eat raced to a record high as the Covid-19 pandemic boosts demand for takeaways.
As investors welcomed a 46 per cent rise in orders in the third quarter of the year, helped by tie-ups with McDonald’s and Greggs, the food delivery group’s stock rose another 6.4 per cent, or 562p, to 9404p.
That valued Just Eat at £14.1billion, meaning it is worth more than a host of British industrial titans including Rolls-Royce, BT and BA-owner IAG.
Delivering profits: Just Eat’s current value is £14.1bn, meaning it is worth more than a host of British industrial titans including Rolls-Royce, BT and BA-owner IAG
The dramatic changing of the guard on the FTSE 100 index of blue-chip firms underlines how the coronavirus crisis has altered the way millions live.
Just Eat, which joined forces with Dutch rival Takeaway.com earlier this year, has benefited from lockdown restrictions, which have prompted more families to stay in and order food deliveries instead of going out to eat.
The company received 151.5m orders between July and September – up from 103.6m in the same period last year.
The 46 per cent rise in third-quarter orders was even bigger than the 42 per cent increase reported in the second quarter.
Even in the UK, where the Government ran the Eat Out to Help Out scheme in August to encourage families back into restaurants, quarterly orders rose 43 per cent to 46.4m.
And that figure was boosted by the addition of 800 McDonald’s restaurants and 300 Greggs sandwich shops to Just Eat’s online service this year.
But the company, which also operates in Germany, Canada, the Netherlands, Australia, France, Spain and Italy, is battling fierce competition from rivals such as Deliveroo and Uber Eats that have capitalised on the pandemic as well.
In a bid to expand its reach in the US, it will merge with American rival Grubhub next year after sealing a £5.8billion takeover.
But it could soon face stiffer competition from a better-funded Deliveroo, which has just had an investment from Amazon cleared by the competition watchdog.
Dan Thomas, an analyst at research group Third Bridge, cautioned that this make Just Eat’s main challenge defending its dominant position in the UK.
‘As Deliveroo and Uber Eats develop and expand their logistics capabilities one could expect a greater level of competition outside of London, where Just Eat enjoys much higher market share,’ he said.
And Russell Pointon, director of consumer and media at research firm Edison Group, said the firm’s takeover of Grubhub could prove to be a ‘double-edged sword’ that could lead to tougher regulatory scrutiny.
But he added: ‘Domestically, Just Eat’s increased offerings, with Greggs and McDonald’s, is likely to complement further market share attempts.’
Just Eat said it had launched an ‘aggressive expansion programme’ in its main markets, which include the UK, in order to shore up its market position.
Jitse Groen, Just Eat’s boss, said: ‘Order growth further accelerated, widening the gap to competitors in our key markets.
‘We are well-positioned for autumn and winter, our traditional growth season.’
The biggest surge during the third quarter came from Canada, where orders rose 98 per cent – from 11.9m to 23.5m.
That was followed by Germany at 47 per cent and the UK at 43 per cent. The company said orders for the nine months to the end of September were now up 37 per cent compared with last year, at 408.3m.
Just Eat was started by Danish entrepreneur Jesper Buch and four friends in 2001, but the other four were later bought out by investor Bo Bendtsen and the business was moved to London.
Buch sold his stake for £3million in 2008 and Bendtsen exited this year, according to Reuters.