Mexico Restaurants Lose up to 4% of Their Online Orders Due to Cancellations

Cancellation rate by average restaurant rating (MX) (Graphic: Business Wire)
Cancellation rate by average restaurant rating (MX) (Graphic: Business Wire)
Distribution of orders and cancellations across hour of day (MX) (Graphic: Business Wire)
Distribution of orders and cancellations across hour of day (MX) (Graphic: Business Wire)

A restaurant that collects 100,000 pesos in delivery orders a week loses between 2,280 and 3,880 pesos due to cancellations.

MEXICO CITY, March 11, 2024–(BUSINESS WIRE)–A study by Otter, a restaurant operating system, has shed light on the financial impact of delivery order cancellations for the Mexican restaurant industry. According to this analysis, restaurants in the country lose between 2.28% and 3.88% of their delivery orders per week due to cancellations. For a restaurant that collects 100,000 pesos in delivery orders per week, the economic loss is between 2,280 and 3,880 pesos per week, or between 123,000 and 210,000 pesos per year.

Canceled orders happen when a customer places an order through delivery apps such as Uber Eats, Rappi or DiDi Food which is then rescinded by the customer or the business on the receiving end of that order. The impact of these cancellations goes beyond immediate economic losses. Most delivery apps will automatically pause stores who experience two cancellations or non-acceptances in a row – resulting in increased downtime and decreased order volume.

Order cancellations by the numbers

Based on an analysis of online orders processed between January 2023 and December 2023, Otter has identified patterns that reveal strategies to reduce cancellations.

  • The average order cancellation rate for restaurants is 2.97%.
    • The average weekly order cancellation rates range from 2.28% to 3.88%.
    • For a restaurant that collects 100,000 pesos in delivery orders per week, the economic loss is between 2,280 and 3,880 pesos per week, or between 123,000 and 210,000 pesos per year.
  • Cancellation rates directly correlate with restaurant ratings. The higher the percentage of order cancellations, the lower the rating.

3 tips to keep order cancellations down at your restaurant

1. Pay close attention to online orders that come in during and after dinner.

  • Online orders spike around dinner time – 26% of orders come in between 6 p.m. and 9 p.m. With more orders come more cancellations: 29% of order cancellations occur during this same time period.
  • Many cancellations take place after dinner, with an above-average cancellation rate between midnight and 5 a.m., reaching as high as 27%.

2. Last hour before closing is crucial to prevent cancellations

  • The hour before the restaurant closes is particularly vulnerable to cancellations. In this last hour of opening, the cancellation rate is 5.25%, double the cancellation rate the rest of the time.
  • To overcome this problem, Otter recommends adjusting the closing time on delivery apps to avoid last-minute orders. Otter’s Live Alerts solution allows you to receive automatic alerts when your stores are disconnected from delivery apps.

3. Identify the main reasons for cancellation and look for effective solutions

  • It is critical to understand why orders are canceled in order to address the causes. When customers cancel orders, it is often related to delivery delays.
  • On the other hand, when the restaurant cancels an order, the reasons are usually internal problems, kitchen closure or out-of-stock items.

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