Just Eat shares plunge as Deliveroo's new feature bites

 
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Deliveroo is supercharging expansion with the move (Source: Getty)

Shares in Just Eat dropped more than seven per cent this morning after Deliveroo announced dramatic expansion plans and a new feature.

Deliveroo anticipates that it will add 5,000 new restaurants to its platform with the 'Marketplace+' feature, which puts it in direct competition with Just Eat.

Restaurants which handle their own delivery will now be able to list on Deliveroo alongside restaurants which deliver food through Deliveroo's rider network.

This hots up competition between Deliveroo and Just Eat, which up until recently only listed restaurants which have their own delivery team.

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Restaurants which choose this option on Deliveroo will also be able to use Deliveroo riders if they need extra capacity to get orders out.

Deliveroo expects 5,000 new restaurants to join the platform as a result, creating another few thousand driver jobs.

By the end of the year, the service will be available in 50 more UK locations.

Read more: Just Eat has enlisted this Dragon's Den star to mentor restaurants

The move marks a divergence from Deliveroo's traditional focus on sit-down restaurants which do not already offer delivery. More takeaway joints which were not previously Deliveroo users are now expected to sign up.

It comes just months after Just Eat said it would invest around £50m in growing its own delivery arm, putting it more directly in competition with Deliveroo and Uber Eats.

By taking on a FTSE giant, Deliveroo is likely to reignite speculation that it is planning its own IPO.

Will Shu, Deliveroo's founder and CEO, told journalists yesterday that the company had big plans to grow, but that it was "not in any rush" to go public.

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Analysts said this morning that the move was a significant threat to Just Eat. Barclays analysts said it represented "another increase in the competitive environment".

Shares in Domino's Pizza were also down, to the tune of 2.4 per cent, while Delivery Hero's shares fell 1.3 per cent.

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