Cancellation of Takeaway Orders Increases in the Last Hour of Restaurant Operation

On average, 20% of online orders and 31% of order cancellations occur in the hour before the restaurant closes.

Mar 11, 2024 - 10:32
Mar 11, 2024 - 10:33
Cancellation of Takeaway Orders Increases in the Last Hour of Restaurant Operation
Cancellation of Takeaway Orders Increases in the Last Hour of Restaurant Operation

A recent study conducted by Otter has revealed figures on the financial impact of takeaway order cancellations for UK restaurants. The study found that the last hour of operation is a critical time for cancellations, with restaurants experiencing a 1.74x higher cancellation rate than those operating beyond this hour. On average, 20% of orders and 31% of cancellations occur within the last hour before closing time. In response to this challenge, Otter advocates for a review of restaurant operating hours and calls on businesses to establish buffer times to mitigate the clash between last-minute orders and closing schedules.

Based on a comprehensive analysis of 30 million orders processed in the UK from January 2023 to December 2023, Otter has identified key patterns and trends that reveal strategies to reduce cancellations and protect revenue. The research shows that cancellations predominantly happen during peak ordering periods. The evening rush from 6 to 9 pm witnesses the highest proportion of cancellations, accounting for 27% of the day’s cancellations among 36% of orders. Off hours between 10 pm to 10 am account for 28% of cancellations, but only 13% of orders.

The impact of order cancellations is felt across the country, with UK restaurants facing a loss ranging between 0.66% and 1.33% of their weekly takeaway sales due to cancellations. For a restaurant generating a weekly revenue of £10,000, this translates to a loss ranging from £66 to £133 per week, or between £3,564 and £7,182 per year.

Why order cancellations matter

Cancellations arise when customers place online orders via delivery apps such as Uber Eats, Deliveroo, or Just Eat, which are subsequently cancelled by either the customer or the restaurant. Common reasons for customer cancellations include delayed deliveries, while internal issues, closed kitchens, or out-of-stock items are the primary reasons for restaurant cancellations.

The impact of order cancellations extends beyond immediate financial losses. As delivery apps increasingly prioritise high-performing restaurants, most platforms will automatically pause stores who experience two cancellations or non-acceptances in a row, resulting in increased downtime and decreased order volume.

For restaurants looking to thrive in a highly competitive market, addressing the root causes of cancellations is imperative. By leveraging the insights from Otter's study and implementing proactive strategies to minimise cancellations, UK restaurants can ensure profitability and deliver exceptional customer experiences amid changing consumer preferences and market dynamics.