Yelp: 60 percent of virus-related business closures are now permanent
By Yelp
September 17, 2020 | 12:49 pm CDT
Data from Yelp's recently released September Economic Impact Report indicates that business closures are increasing as a result of the COVID pandemic.
As of August 31, 163,735 businesses have indicated on Yelp they've closed, a 23 percent increase since the middle of July. This contrasts with Yelp's previous report, which showed a decrease in the total number of closures.
What's even more noteworthy is that 97,966 of these businesses have closed permanently - which means that 60 percent of all closed businesses will never reopen.
Yelp writes:
"Some business sectors have been able to weather the COVID-19 storm particularly well. In general, professional services and solo proprietors as a whole have been able to maintain a relatively low fraction of closures since March 1. This group includes lawyers, real estate agents, architects, and accountants – all with only two to three out of every thousand businesses closed, as of August 31. Health related businesses in particular have been able to maintain a low rate of closures – orthopedists, internal medicine, hospitals, physicians, family doctors and OB/GYNs all have less than three closures out of every thousand businesses.
"Yelp’s closure data also shows that demand for home, local and automotive services has remained robust with a far lower rate of closures compared to restaurants and retail. Towing companies, plumbers and contractors in particular have maintained a low rate of closures, with only six to seven out of every thousand businesses closed. In fact, the share of consumer interest in home and local services is up 24 percent between March 1 and August 31, relative to all categories on Yelp, compared to the same time last year.
The restaurant industry continues to be among the most impacted with an increasing number of closures – totalling 32,109 closures as of August 31, with 19,590 of these business closures indicated to be permanent (61%). Breakfast and brunch restaurants, burger joints, sandwich shops, dessert places and Mexican restaurants are among the types of restaurants with the highest rate of business closures. Foods that work well for delivery and takeout have been able to keep their closure rates lower than others, including pizza places, delis, food trucks, bakeries and coffee shops.
Meanwhile, bars and nightlife, an industry 6X smaller than restaurants, has endured an especially high closure rate, with an increasing percentage of closures being permanent. As of the end of August there were 6,451 total business closures, of which 3,499 were permanently closed (54%). The share of permanent closures within bars and nightlife have increased by 10% since our Economic Average Report in July.
Retail and shopping follows closely behind restaurants with 30,374 total business closures, 17,503 of which are permanent (58%). Similar to bars and nightlife, the share of permanent closures increased by 10% since July. Both men and women’s clothing, as well as home decor, have the highest rate of business closures.
Even as the pandemic spreads nationally, geographically Yelp data shows business closure rates vary across the country. Bigger states and metros with higher rents and more stringent local operations for small businesses throughout the last six months have felt a greater toll. So have businesses more closely linked to physical locations that require crowds of consumers to attain profitability. Meanwhile, smaller cities and solo operations that can do their work one-on-one or virtually have proven better positioned to stay in business.
For the states with widespread business closures, the economic struggle appears to be closely coupled with unemployment rates. Hawaii, California, and Nevada have the highest rate of total closures and permanent closures – they’re also the three states with the highest unemployment rates, and among the biggest states for tourism. Meanwhile, West Virginia and the Dakotas have the lowest closure rates.
The states with the most closures are home to the hardest-hit metros: Las Vegas in Nevada, Honolulu in Hawaii, and several of the largest California urban areas all are among the metro areas with the highest total closure and permanent closure rates (San Diego, San Francisco, San Jose, Los Angeles and others), with roughly 20 businesses per thousand temporarily or permanently closing their doors since March 1. Larger metros with far fewer closures tend to be in the East, including Pittsburgh, Philadelphia, and Baltimore, all with closure rates below 10 per thousand."
Yelp will release its next report in Q3. See the full Q2 report here.

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