Just Eat competition worries drag on FTSE 100 index
It comes amid fears that Deliveroo could eat into Just Eat’s market share.
The FTSE 100 ended the day flat, having been dragged down by Just Eat shares on competition fears from Deliveroo.
The index closing lower by 0.1 point at 7,703.71 points after a near 5% or 40p drop in Just Eat’s stock price to 810p, making it the worst blue chip performer.
It follows an announcement by rival Deliveroo that restaurants will now have the choice of fulfilling orders using their own drivers.
Eateries previously had to use Deliveroo’s fleet.
The move will pit Deliveroo directly against Just Eat, which only offers a platform for restaurants to sell and deliver food with their own drivers.
David Madden, a market analyst at CMC Markets said: “Just Eat shares are in the red after Deliveroo confirmed ambitious expansion plans yesterday.
“Deliveroo hopes to sign up 5,000 new eateries, and it will offer assistance to restaurants that have their own delivery staff, but need additional drivers during busy periods.
“The aggressive expansion plans have eroded investor confidence in Just Eat, as dealers feel it will dent profit.”
Sterling staged a mild recovery against the US dollar, to trade about 0.05% higher at 1.337.
The UK currency originally slumped in the wake of data showing inflation holding steady at 2.4% in May.
But investors later turned attention to the US Federal Reserve meeting, which is expected to deliver another interest rate hike.
Against the euro, the pound was down 0.3% at 1.135.
In oil markets, Brent crude jump 1.2% to 76.35 US dollars per barrel after data from the Energy Information Administration showed a larger than expected drop in US stockpiles.
In UK stocks, WPP dropped 11.5p to 1,235p as the advertising giant faced a bruising AGM where nearly a third of shareholders rejected a bumper payout for outgoing chief executive Sir Martin Sorrell.
Top bosses also faced a flood of questions surrounding Sir Martin’s controversial departure and WPP’s trajectory as it searches for his replacement.
Sainsbury shares rose 1.6p to 308.2p despite news the grocery giant’s chief executive will be hauled before MPs to explain how the supermarket’s proposed £12 billion merger with Asda will impact farmers, suppliers and consumers.
Away from the top tier index, Dixons Carphone shares suffered after the retailer revealed 5.9 million customer bank card details and 1.2 million personal data records were hacked during a cyber attack last year.
The group is contacting all those affected, but sought to assure customers it had no evidence that this had resulted in fraud at this stage.
Shares in pub group JD Wetherspoon fell 10p to 1,260p amid news that it will replace champagne and wheat beers produced in France and Germany with more drinks from the UK – and those from outside the EU – in the run up to Brexit.
The switch will affect all 880 Wetherspoon pubs from July 9.
Biffa tumbled 6p to 235.5p after announcing that long-standing boss Ian Wakelin will replaced by the firm’s finance chief Michael Topham after eight years on the job.
The biggest risers on the FTSE 100 were Glencore up 14.4p at 398p, Hargreaves Lansdown up 44p at 2,059p, International Consolidated Airlines Group up 12.8p at 712.2p, and EasyJet up 30p at 1,782.5p.
The biggest fallers on the FTSE 100 were Just Eat down 40p at 810p, Standard Chartered down 12.7p at 724.1p, Sky down 23p at 1,335p, and DCC down 115p at 7,170p.