Why has Just Eat's average order value declined by 15% for takeaway orders in urban areas over the past 6 weeks?

Introduction

Just Eat's 15% decline in average order value for takeaway orders in urban areas over the past 6 weeks is a concerning trend that requires immediate attention. To address this issue, I'll employ a systematic approach to identify, validate, and resolve the root cause while considering both short-term and long-term implications.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be a seasonal effect. Has this decline coincided with any particular season or event?

Why it matters: Seasonal trends can significantly impact consumer behavior. Expected answer: No specific seasonal event correlates with this decline. Impact on approach: If seasonal, we'd focus on cyclical patterns; if not, we'd investigate other factors.

• Considering the specificity of urban areas, I'm curious about any changes in competition. Have any new food delivery services entered these markets recently?

Why it matters: Increased competition could explain shifts in order value. Expected answer: No significant new entrants in the past 6 weeks. Impact on approach: If competition has increased, we'd focus on differentiation strategies; if not, we'd look at internal factors.

• Given the focus on average order value, I'm wondering about any changes to the minimum order threshold. Has Just Eat adjusted its minimum order requirements recently?

Why it matters: Changes in minimum order requirements directly impact average order value. Expected answer: No recent changes to minimum order thresholds. Impact on approach: If changed, we'd analyze the impact of the new threshold; if not, we'd explore other pricing-related factors.

• Considering the urban focus, I'm thinking about potential changes in restaurant partnerships. Has there been any significant shift in the types or number of restaurants available on the platform in these areas?

Why it matters: Changes in restaurant offerings can affect order values. Expected answer: No major changes in restaurant partnerships. Impact on approach: If changed, we'd analyze the impact of new restaurant mix; if not, we'd look at other factors affecting order composition.