Yelp Says This Is How Many Restaurants Have Quietly Closed for Good
It's no secret that the restaurant industry has been utterly devastated by the coronavirus pandemic and the resulting economic shutdown. But the question remains: Exactly how bad is it out there for your favorite dining establishments? Well, according to a new report from the user-generated review giant Yelp, it's perhaps worse than you previously thought.
The site recently reported that upwards of 24,000 restaurants across the country have closed since March 1st.
More than half of those closures appear to be permanent.
Yelp's recently released second-quarter report says that many business sectors have struggled during COVID-19, but none of them have had it worse than the restaurant business:
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.
The restaurant closures aren't merely confined to smaller, independently-operated ones. In the first quarter of this year, only four national chains booked a profit, which was largely due to their ability to deliver foods and serve customers via drive-through.
From at least one point-of-view, the Yelp data is actually good news. Last month, a report funded by the Independent Restaurant Coalition predicted that nearly 85 percent of all independent restaurants would close this year without federal intervention. If the closures reached that high, 425,000 restaurants would go out of business.
Meanwhile, a report by the National Restaurant Association in March said that 3 percent of all U.S. restaurants (roughly 30,000) were already closed.
In a tiny sliver of silver lining, Yelp also reported that interest in takeout and delivery services are—unsurprisingly—exploding, up 148 percent compared to a pre-COVID-19 world.