British food delivery service Deliveroo on Wednesday closed its Australian business, citing a tough business environment, as consumers pulled back on takeaways due to rising prices.

Deliveroo, which competes with rivals like Uber Eats and U.S. giant DoorDash, said the market was highly competitive and the company did not hold a broad base of strong local positions.

In the first half of the year the Australian business had represented approximately 3% of Deliveroo's total gross transaction value (GTV), it said.

"This was a difficult decision and not one we have taken lightly," chief operating officer Eric French said in a statement.

"Our focus is now on making sure our employees, riders and partners are supported throughout this process.”

French said the company had determined that it could not reach a sustainable and profitable scale in Australia without considerable financial investment.

Local subsidiary Deliveroo Australia Pty Limited had been placed into voluntary administration and would permanently cease trading imminently, the company said in the statement.

London-listed Deliveroo warned last month that sales growth would be at the lower end of its previous guidance, because rising prices were deterring people from ordering takeaways.

(Reporting by Praveen Menon; Editing by Bradley Perrett)