Food Delivery Stocks Are the Latest Casualties of the Amazon Effect

(Bloomberg) -- Having already pummeled the likes of grocers and insurers, the Amazon effect is now hitting Europe’s listed online food delivery companies.

Just Eat Plc shares slumped nearly 11% on Friday, the biggest casualty of news that Amazon.com Inc. is leading a $575 million funding round in Deliveroo. Takeaway.com NV and Delivery Hero SE also slid on concern the move may lead to new competitive pressures.

Food Delivery Stocks Are the Latest Casualties of the Amazon Effect

“From the point of view of a business owner, we can’t think of much more terrifying news than hearing Amazon is entering your backyard,” Ameet Patel at Northern Trust Capital Markets said in emailed comments.

European investors have learned to beware of Amazon’s incursions. A report last August that the tech giant was holding talks with insurance companies battered shares in GoCompare.com Group Plc and Moneysupermarket.com Group Plc. When the U.S. company announced its acquisition of Whole Foods Market Inc. in June 2017, grocery stocks across Europe plummeted.

Not everyone is taking fright. According to Liberum analyst Ian Whittaker, all Amazon’s move changes in the food delivery space is to underpin Deliveroo’s valuation for an initial public offering. Market leaders such as Just Eat are more likely to become takeover targets, he also said, citing Uber Technologies Inc. and U.S. food delivery groups looking to expand internationally.

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