Ocado, HelloFresh, Just Eat, Delivery Hero stocks slip — here’s why

A grocery delivery courier who works for Just Eat in London.

Simon Dawson | Bloomberg | Getty Images

LONDON – Europe’s food suppliers see their share prices decline as investors ponder life after the coronavirus pandemic.

Just Eat Takeaway and Ocado were among the biggest losers on the London Stock Exchange on Tuesday, falling 1.1% and 1.7% respectively at lunchtime. In Germany, Delivery Hero fell 0.9% and HelloFresh was quoted 3.4% lower on the Frankfurt Stock Exchange.

Daily moves are not massive, but stocks in the sector have gradually declined over the past few weeks as economies reopen. Just Eat Takeaway’s shares have fallen around a third since their October high, and Delivery Hero is down around 17% since its high in January.

“Easter gave many people a tiny taste of the old normal and piqued their old appetite,” Danni Hewson, financial analyst at AJ Bell, told CNBC.

“The food and drink prospect is giving a boost to companies like Wagamama, owner of the restaurant group and pub chain Wetherspoons,” said Hewson. “In contrast, lockdown winners like Ocado through Hello Fresh see stocks falling.”

UK pubs and restaurants will reopen on April 12th, albeit only outdoors. However, other parts of Europe have put in new lockdowns as their vaccination programs lag and a third wave of coronavirus threatens to take hold.

Hewson believes the long-term impact on food delivery platforms is unlikely to be disastrous, adding that the initial novelty of being able to eat and drink from home could soon wear off. And it may not be that easy to get a reservation either.

“There will be a limit to how many of us can get our hands on a coveted outdoor table,” she said. “There will still be many customers who prefer to wait for these much-discussed vaccination records before heading out.”

“What we are seeing today are markets waking up to the knowledge that the tremendous growth in these sectors cannot be sustained over the past year. Demand will continue, but a slowdown is inevitable,” she added.

Susannah Streeter, a senior investment and market analyst at Hargreaves Lansdown, said the UK government’s announcement on Monday that it would reopen the economy fully could contribute to another drop in the share prices of some online grocery stores.

She agreed that the “insatiable demand” for take-out food is unlikely to completely dissipate, but believes that “some customers are bound to experience some decline” as restrictions ease.

As the infection rates drop, many shoppers will also “go back to old habits” and shop in physical supermarkets again, Streeter said.

“However, other customers will get their first taste of the ease and efficiency of online ordering during the pandemic and will likely continue to fill digital baskets as the novelty of queuing at the checkout wears off,” she said.

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