Alexandria, Virginia—To grab, a Singapore-based food delivery company, has lowered its forecast for gross merchandise volume for the year, Reuters reports. The company said a strong dollar and shrinking demand for food delivery services were to blame.
“What we’re seeing with some of the growth trends and consumer behavior is dining out,” Grab CEO Anthony Tan told analysts. “Customers want to save money…they may even show a preference for ordering groceries to cook at home.” Grab also offers a grocery delivery service.
Grab operates in 480 cities in eight Southeast Asian countries. The company raised the low end of its revenue guidance for the year and said it was “laser focused” on profitability as demand for ridesharing peaks in Southeast Asia. Tan expects the share of grab rides to increase once economies reopen.
The company also plans to launch new products to attract “profitable loyal customers” and reduce the cost of serving users.
To reduce corporate costs, Grab will cut inventory and promotions to attract drivers and users, drop unprofitable businesses like its “dark shops” in some countries, and reduce hiring.
The company forecast revenue of between $1.25 billion and $1.3 billion for the year, compared to a previous range of $1.2 billion to $1.3 billion. Grab forecasts gross merchandise volume growth of between 21% and 25% for the year. On a constant currency basis, gross merchandise volume is expected to grow between 25% and 29% compared to its previous range of 30% and 35%.
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