Yelp Economic Average Uncovers a Drop in Total Business Closures and a Rise in Permanent Closures During the Second Quarter

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By Julianne Rowe
Senior Manager, Corporate and Product Communications | Yelp, Inc.

Yelp Inc. (NYSE: YELP), the company that connects people with great local businesses, released second quarter data for the Yelp Economic Average (YEA) report, a benchmark of local economic strength in the U.S., which has been adapted to reveal the dramatic impact COVID-19 has had on local economies. YEA uncovers longer term trends, including a correlation between increased interest in restaurants, bars and nightlife, and gyms to a spike in COVID-19 cases across hotspot states. The report also shows a declining trend in total business closures, however, permanent closures now account for 55% of all closed businesses since March 1, a 14% increase from June. Additionally, YEA finds slower, but still consistent changes in consumers getting back to pre-pandemic activities, as well as sustained interest in supporting Black-owned businesses.

The report finds a correlation between consumer interest in restaurants, bars and nightlife, and gyms in May and COVID-19 cases in June

YEA reflects data from millions of local businesses and tens of millions of users on Yelp’s platform measuring U.S. business closures, as well as consumer interest via page views, reviews and photos. According to researchers, Yelp provides a timely and accurate measure of a huge swath of the economy that is often missed by many major indicators.

“As U.S. cities struggle to balance reopening their local economies and avoid becoming the next COVID-19 hotspot, we’ve seen U.S. business closure data reflect an unstable economy. Yelp data found a decrease in total business closures, but the rate of permanent closures has actually risen 14% between June 15 and July 10,” said Justin Norman, Yelp’s vice president of data science. “Cities such as San Francisco and Honolulu, which have had some of the nation’s strictest stay-at-home orders, are now seeing the highest numbers of closures relative to the number of businesses in their respective cities.”

Key findings include:

Business Closures Data

Oregon endured 2,239 total business closures (both temporary and permanent) between March 1 and July 10. 1,133 businesses are marked as permanently closed as of July 10.

Oregon had the 6th highest rate of business closures (per 1,000 businesses).

Nationally, in the U.S., temporary business closures decrease, while permanent closures continue increasing, now accounting for 55% of all closed businesses since March 1. As of July 10, total business closures dropped to just more than 132,500, since March 1. We last reported 140,000 total business closures on June 15, which increased to more than 147,000 total business closures on June 29.

Yelp data shows a statistically significant correlation between an increase of consumer interest in restaurants, bars and nightlife, and gyms in May and an increase in COVID-19 cases in June. 

The ten states with the largest increase in COVID-19 cases in June and a significant increase in consumer interest in restaurants, bars and nightlife, and gyms: Florida, Idaho, Nevada, Oklahoma, South Carolina, Arizona, Texas, Georgia, Kansas, Alabama. 

The ten states with the largest decrease in COVID-19 cases in June and relatively flat consumer interest in restaurants, bars and nightlife, and gyms: Massachusetts, Michigan, Washington D.C., New York, Connecticut, Maryland, New Hampshire, Rhode Island, Virginia, Illinois.

Consumer interest has continued to shift since May, but less rapidly than we saw in March and April. 

Interest for alcohol-related activities (wineries, breweries, etc.) are up, while grocery is down. Formal wear and bridal shops are up and people are heading back indoors for axe throwing, escape games and boxing. As COVID-19 cases increase we’re also seeing an increase in consumer interest for urgent care and emergency rooms. 

People’s interest in supporting the Black community by spending at Black-owned businesses continues to remain high. 

From May 25 to July 10, there have been more than 2,500,000 searches for Black-owned businesses on Yelp, compared to approximately 35,000 over the same time period last year, with a recent increased interest in specific Black-owned businesses, such as restaurants, boutiques, doctors and book stores.

Read the full Yelp: Local Economic Impact Report

https://www.yelpeconomicaverage.com/yelp-coronavirus-economic-impact-report.html
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