Tortilla ends partnership with Deliveroo as commission charges ‘challenge margin performance’
The group, which is the UK’s largest fast-casual Mexican restaurant brand, says that while its previous multi-partner approach to delivery supported ‘strong growth in sales volumes and awareness’, delivery commission charges had ‘challenged margin performance’.
To mitigate this, the group sought for a new delivery structure and to strengthen the relationship between fewer partners.
“We’re delighted to extend our relationships with Uber Eats and Just Eat,” says Andy Naylor, UK managing director at Tortilla.
“We are confident that these strategic partnerships will play a key role in supporting sustainable, profitable growth across the important delivery channel, underpinning our growing presence as the UK’s leading fast-casual Mexican brand.”
Tortilla is the second major chain in the QSR space to cut ties with Deliveroo in the last six months. Back in October, KFC ended its partnership with the platform to focus its efforts on other delivery channels, including its own.
In a statement, a spokesperson for Deliveroo said: “Deliveroo’s focus is providing great selection and value on our platform and we are proud to partner with roughly 60,000 of the best restaurants in the UK and Ireland. With thousands of incredible Mexican restaurants on Deliveroo, including many that are only available on our platform, there’s a huge selection for people to choose from.”
Tortilla adds that the review of its delivery strategy forms part of a series of wider ongoing management initiatives as the group remains focussed on its strategic objective to drive EBITDA margin and profitability.
Back in the summer, the group reported half year results in line with 2023 expectations, with revenue rising by 22% year-on-year to £32.7m.
Adjusted EBITDA for the period was £1.8m for the period, with a loss before tax of £0.6m.
Tortilla subsequently launched a new 'Sunset menu' featuring £2.50 Margaritas as part of a push to take a bigger slice of the evening market.
