Home Business Almost 60 percent of business closures are now permanent, new Yelp data...

Almost 60 percent of business closures are now permanent, new Yelp data shows – NBC News

8
0

Yelp on Wednesday released its latest Economic Average Report, revealing business closures across the U.S. are increasing as a result of the coronavirus pandemic’s economic toll.

As of Aug. 31, 163,735 businesses have indicated on Yelp that they have closed, a 23 percent increase since mid-July.

Yelp also measures businesses whose closures have become permanent. That number has steadily increased over the past six months, now reaching 97,966, representing 60 percent of closed businesses that won’t be reopening.

“Overall, Yelp’s data shows that business closures have continued to rise, with a 34 percent increase in permanent closures since our last report in mid-July,” Justin Norman, Yelp’s vice president of data science, told CNBC.

Yelp’s September report marks six months since March 1, the date that Yelp considers to be the beginning of the business crisis.

In order to gather closure data, Yelp monitors changes in business hours or descriptions on its app, offering an immediate, localized view of the impact the pandemic has had on small businesses.

“Despite the hard hit that small businesses have certainly taken, we’ve seen that home, local, professional and automotive services have been able to withstand the effects of the pandemic better than other industries,” Norman noted.

Home and professional services such as landscapers, contractors, and lawyers, see a much lower closure rate than clothing stores and even home decor businesses. Auto and towing services also reported a relatively low closure rate.

“Consumers still need these services,” Norman said. “Through the rise of virtual consultations, and contactless or socially distanced services, these businesses have been particularly resilient during this time.”

Throughout the past six months, restaurants, bars, and nightlife have been hit the hardest by the restrictions brought along by the pandemic: 32,109 restaurants have closed, as of Aug. 31. The number of restaurants forced to permanently close is slightly above Yelp’s total average, at 61 percent.

Yelp has also noted that businesses already well-suited for takeout, such as pizza places, coffee shops, and delis, are treading water better than other restaurants. The types of restaurants with the highest closures include breakfast and brunch places, sandwich shops, and Mexican restaurants.

Norman noted that policy changes in the coming weeks and months could have an impact on whether these closures turn permanent. “The continued rollout of indoor dining, especially in metros like New York City, will be worth watching as it will be critical for businesses to maintain the right balance of practicing social distancing and other responsible safety measures to ensure they can stay open.”

Bars and nightlife venues have also seen a large impact from the pandemic, as a sector that can’t adapt as easily to outdoor dining or takeout. The rate of permanent closures has increased 10 percent since July, now sitting at 54 percent.

Retail saw a similar increase in permanent closures since July, rising 10 percent to a total of 58 percent.

The report showed a surprising month-over-month increase in permanent closures for beauty businesses — since July, about 42 percent more businesses were indicated as permanently closed.

Hawaii has had the most number of closures, followed by California, Nevada, Arizona and Washington state.

Different states are also facing varying degrees of closures, and perhaps unsurprisingly, Yelp sees a correlation between states with a high number of closures and states with a high unemployment rate. Looking at closures per 1,000 for each state, Hawaii has been hit the hardest, followed by California, Nevada, Arizona and Washington state. Hawaii’s unemployment rate sat at 13 percent in July, and the state also relies heavily on tourism.

“Due to the pandemic, these states were greatly impacted by travel restrictions and also face high rates of unemployment,” Norman said. “These states are also home to the hardest-hit metro areas, including Las Vegas, Honolulu and several of the largest California urban areas like San Diego, San Francisco, San Jose and Los Angeles.”

Yelp has also noted discrepancies between large cities, where closures are higher and businesses are not faring as well, and smaller areas, which have proved more forgiving to small business. Los Angeles and New York report the highest number of closures: Los Angeles has seen 15,000 closures, half of which are permanent, and New York has seen over 11,000 closures, with the high rate of 63 percent reported as permanent.

“Meanwhile, we’re actually seeing larger metros with fewer closures in the East, including Pittsburgh, Philadelphia, and Baltimore,” Norman noted.

Ultimately, Yelp’s data shows that Main Street is still feeling the economic impact of the pandemic, and many states and areas of business may not see a recovery soon.

“While it’s hard to say when we can expect business closures to stabilize, we’ve continued to see businesses successfully adapt to these uncertain times over the last six months thanks to their own hard work, innovation and local policy changes,” Norman said.

Let’s block ads! (Why?)

Original Post Source link