Just Eat, Uber, Deliveroo and Moss Bros

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“Every small step forward counts in the world of investing and so it is pleasing to see the FTSE 100 head into the weekend on a positive note. The blue chip index is on track to end the week up 1.7%, a decent result given that we’ve spent the previous few months with a miserable performance on the markets. The biggest movers on the week have been the mining stocks as investors start to regain confidence in some of the riskier assets. Anglo American is the star performer, up 12% in value. It has been a bad week for Smiths Group and Burberry, both down approximately 8% in value,” says Russ Mould, Investment Director at AJ Bell.

Just Eat / Uber / Deliveroo

“They say strength in numbers can be a powerful force and so it is no surprise that Just Eat’s shares have taken a big hit on speculation that Uber is going to buy Deliveroo. The combination of two competitors is the last thing Just Eat wants to hear, particularly when it is already trying to play catch up on the delivery side of its business. Sector peer Delivery Hero also saw its shares take a hit on the news.

“Uber buying Deliveroo makes sense as it would give it a stronger footing in the food delivery industry. Its Uber Eats platform has been growing fast and the company said earlier this year that it planned to launch in 100 cities around the world.

“Deliveroo has also been stepping up its efforts to grab a bigger slice of the food delivery market with the launch of a new service called Marketplace+. This lets restaurants with their own delivery fleets join Deliveroo and make use of the company’s rider network, so that they can improve delivery times and expand to new areas.

“Just Eat hasn’t been able to rest on its laurels for some time. Competition has been intensifying and there has also been a backlash from some of its restaurant clients against high fees. Many restaurant owners have abandoned the platform to focus on developing their own marketing and technology, or seek alternatives.

“And Just Eat itself has been forced to spend millions of pounds on developing a delivery network as historically it has only run the ordering platform for clients. Not having delivery capabilities looked like a huge strategic flaw, given how rivals were biting at its heels, and Just Eat’s recent decision to invest in this area was long overdue if it had any chance of fighting off the competition.”

Moss Bros

“It feels like the excuse for weak trading from suit seller Moss Bros today falls into the ‘dog ate my homework’ category.

“Perhaps the company could be forgiven for blaming the hot weather – shopping for a heavy suit might not appeal when the sun is blazing. However, attributing its problems to the ‘distraction’ posed by England’s success at the World Cup feels pretty tenuous.

“As a reminder, England played seven games at the tournament and of those, just three, including a pretty meaningless third place play off, were played at times when most Moss Bros stores would even have been open.

“Plus, manager Gareth Southgate’s habit of wearing a waistcoat on the touchline saw sales of M&S waistcoats soar and could arguably have given a boost to the idea of wearing formalwear in general. After all, Moss Bros also sells waistcoats and should have been a beneficiary of the Southgate trend too.

“The company had endured a tough first quarter of its own making as it faced a shortage of stock due to supply issues, something it had corrected by May.

“If the weather and World Cup are truly to blame for the recent rough patch then investors will expect to see a distinct improvement in performance when the company next updates the market.”

These articles are for information purposes only and are not a personal recommendation or advice.