Yelp’s Economic Average Report reveals 60% of COVID-19-related business closures in the United States are permanent

Yelp, a U.S-based local business review app, released its updated Economic Average Report that suggested the business closings amid the onslaught of the pandemic on the economy of the U.S. are increasing exponentially. In addition to monitoring the businesses that have closed, Yelp also takes note of the permanently closed businesses.

By the end of August, 163,735 businesses across the United States announced on Yelp the closing of their businesses. And although this is a high number, it is significantly lower than 180,000 businesses that closed their doors when the pandemic was in its initial stages. However, there has been a 23% in business closures since mid-July. Increasing through the six months, the businesses that have permanently shut their doors have reached 97,966, which is 60% of the total closed businesses. Yelp monitored change in business hours and descriptions that offered an overview of how the pandemic had affected the small and local businesses. The data showed that consumers preferred to stay home, and services, such as landscapers, contractors, etc., saw a much lower closing rate, along with auto and towing business. It also showed that takeout places such as pizza places, coffee joints, and delis experienced a much lower closing rate. Bars and nightlife have been hit the hardest, with 54% joints closing permanently. Retail stores permanently closed stands at 54%. Yelp also said there were a lot of discrepancies between small business closures between large and small cities. In conclusion, Yelp’s data report suggests there is still a lot of negative impact of the pandemic on the stores of all segments, and several businesses may not be opening their doors to customers ever while some businesses may not witness a recovery any time soon.

Justin Norman, VP of Science at Yelp, said that it is difficult to estimate when the businesses would stabilize, but a lot of businesses have increasingly adapted to the new normal over the last six months.