Yelp released an Economic Impact Report, detailing the changes that restaurants, retail, and other industries have undergone because of the pandemic and the Black Lives Matter protests. And for restaurants, it’s a dire outlook.
According to Yelp, 53 percent of restaurants that had closed since March 1 have since indicated permanent closures on their Yelp pages.
Of the 23,981 restaurants used in Yelp’s report, 47 percent have been labeled as temporarily closed.
The report also shows that diners are eager to eat out as states encourage businesses to reopen, despite spiking COVID-19 cases.
Strangely, shared food is what people are craving. Yelp names “fondue (up 123 percent), tapas bars (up 98 percent), hot pot (up 49 percent) and even buffets (up 17 percent)” as dining experiences making a comeback, while foods that were readily available through delivery and takeout — like pizza— aren’t as enticing.
Between a baffling PPP loan system, no cancelation of rent or mortgage payments, and the necessity that restaurants turn a profit while operating at half-capacity or through takeout only, it’s sadly unsurprising that 53 percent of Yelp’s restaurants have closed permanently.
Those that remain open now face the risk of a second round of closures, as COVID-19 keeps spreading at an alarming rate.
Some Businesses Slowly Reopen, While Many Permanently Close
As of June 15, there were nearly 140,000 total business closures on Yelp since March 1. In April Yelp reported more than 175,000 business closures, indicating that more than 20% of businesses closed in April have reopened.
Of all business closures on Yelp since March 1, 41% are permanent closures. The data shows the largest spikes of permanent closures occurred in March, followed by May and June, indicating that the businesses that were already struggling had to permanently close right away and the businesses that were trying to hold on, but unable to weather the COVID-19 storm, were forced to shutter in recent months.
While many business sectors have struggled during COVID-19 there are a few industries that have endured especially high closure rates.
Among those with the highest rate of business closures are shopping and retail (27,663 closed businesses), restaurants (23,981 closed businesses), beauty (15,348 closed businesses) and fitness (5,589 closed businesses).
In March, Restaurants had the highest number of business closures, compared to other industries, and have continued to close at high rates.
Of the businesses that closed, 17% are restaurants, and 53% of those restaurant closures are indicated as permanent on Yelp. Restaurants run on thin margins and can sometimes take months or even years to break even, resulting in this higher rate of permanent closures.
Though some businesses have shut down permanently, many have found innovative ways to weather the storm and continue serving consumers.
Many restaurants pivoted to offering takeout and delivery, while some experimented with take home meal and drink kits, and even virtual cooking classes.
Servicing food to-go produces high margins for restaurants, and we’ve seen a 10X increase in searches for takeout since March 10.
With many retail businesses shifting to curbside pickup, we’ve seen consumer interest spike in obtaining their goods in this way with a 20% increase in searches for curbside pickup.
In the beauty industry we’ve seen hair stylists offering video hair cutting tutorials, estheticians offering virtual consultations, and small shops shifting their focus to ecommerce.
Fitness in particular has seen a significant shift in their business model with gyms and studios offering virtual classes and personal trainers offering one-on-one virtual training sessions.
If nothing else, local businesses owners have proven themselves to be resilient and creative during these trying times.