Home meal kits company Marley Spoon has paused price hikes on one of its labels despite “horrendous” food inflation and growing competition continuing to bite at the company’s bottom line.
The crowded meal kits market has been forced to cater for tighter customer budgets in recent months amid high interest rates, inflation and cost-of-living pressures, but Australian Securities Exchange-listed Marley Spoon insists it has a value proposition supermarkets can’t beat.
The Berlin-headquartered company last week reported its number of active subscribers in Australia had fallen 18 per cent year-on-year to 88,000, a figure it attributed in part to declining marketing spend.
Still, local chief executive Rolf Weber said this week he was confident of future growth, saying the company was working to help customers navigate economic challenges.
“When you choose to serve yourself with (value brand) Dinnerly or Marley Spoon, you really are 100 per cent certain what you’re going to spend for food for the week versus getting a shock at (the supermarket checkouts),” he said.
“We help our customers make sure that they can budget ahead.”
Mr Weber — who was in Perth to open the company’s new 12,650sqm warehouse in Jandakot, which will create 80 jobs — said Marley Spoon aimed to meet increasing demand for convenience, healthier living and online grocery shopping.
“We’re really confident that there is continued future growth for all of our brands, not only here in WA but across Australia,” he said.
“We do expect to see a lot of efficiency gains here but given it has a bigger footprint, it also allows us to continue to increase the choice of meals that we’re going to bring to our customers.”
Marley Spoon sources more than 90 per cent of its produce and 100 per cent of its beef, pork, lamb and chicken from WA and Mr Weber acknowledged it had not been immune to the “horrendous” food inflation.
He said the company had to pass on a 4 to 5 per cent price increase to its customers in the middle of last year to combat rising costs but has since managed rising inflation.
“We’re quite confident that with internal operational improvements, we can continue to hold our prices,” he said.
Mr Weber also shrugged off concerns Marley Spoon’s share price — down 52 per cent over the past year — was following a downward trend among other publicly traded players in the industry, including Perth-based My Foodie Box, which has tanked 80 per cent.
“We’re very early on in our journey and we really have a long-term view on what role we can play in a very, very large category,” he said.
“While (it) may be a little bit frustrating when stock prices go down, it isn’t our long-term concern. We’re spending most of our time worrying about making sure our customers get great food and great cost.”
Mr Weber said prices at Dinnerly were frozen a few months ago and the brand will continue to “hold out prices” in the future.
Dinnerly has also introduced a saver range in which customers can purchase meals starting at $4 a portion.
“That’s going to be really, really hard to beat … we continue to look for opportunities to help our customers save money,” Mr Weber said.
The new warehouse takes Marley Spoon’s total number of meal kit centres across Australia to three with one manufacturing facility in Melbourne.