Nearly 16,000 restaurants have closed permanently due to the pandemic, Yelp data shows
There have been 26,160 total restaurant closures.
July 25, 2020, 1:19 AM
10 min read
Volatility has been a kiss of death for thousands of restaurants during the coronavirus pandemic.
Abrupt closures, inconsistent reopenings, changes in public health guidance for operations and other state-mandated orders have pushed the food service industry to the brink.
New data from Yelp revealed the stark reality of permanent closures for an alarming number of restaurants, which already ran on thin margins.
The review site’s latest Local Economic Impact Report, released Wednesday, showed that 60% of the restaurants that temporarily closed due to the pandemic have since shuttered for good.
There were 26,160 total restaurant closures on Yelp as of July 10 and 15,770 of those have made the decision permanent, according to Yelp.
“The restaurant industry now reflects the highest total business closures, recently surpassing retail,” the report stated.
Chefs, general managers, owners, bartenders and diners have all attempted to raise their voices to get aid for the hard-hit sector. But those cries have been drowned out by the sound of businesses boarding up their eateries, shuttering service for good.
“Restaurants are known to run on thin margins, which makes a forced closure even more painful for the industry,” Justin Norman, vice president of data science at Yelp, told ABC News.
Norman said that the company’s latest numbers draw a painful correlation for what could come next.
“Unfortunately, we expect these closures to continue,” Norman said. “As COVID-19 cases continue to rise across the county, we anticipate states will roll back or delay reopening plans, which will inevitably impact the future success of all businesses, including restaurants, possibly turning even more temporary closures into permanent ones.”
Restaurant owners have been forced to quickly come up with new adaptations on menus, points of service, hours, delivery and takeout models that better serve their local communities just to keep the lights on.
Yelp looked at changes to service options, delivery and takeaway, but many of the site’s registered restaurants were still unable to sustain their businesses.
“We’ve already seen a ton of success from restaurants that have expanded their takeout and delivery options, some are even offering meal kits, drink kits, cooking classes and pivoting their use of technology,” Norman said, citing the company’s waitlist platform that manages curbside pickup.
Like so many restaurants that have scrambled to make it work, Canlis, a landmark spot in the Pacific Northwest, successfully turned its fine dining model on its head and transformed more than once. First, it existed as a drive-thru burger stand, then a coffee and bagel shop. It added farm-to-table produce kits, full dinner deliveries with virtual bingo and finally established itself as an entirely outdoor crab shack built specifically to accommodate social distancing, owner Mark Canlis explained to ABC News.
But for restaurants without the capital or capacity to back up lofty changes like that, closing permanently has become an unfortunate reality around the U.S.
Restaurants have lost more revenue and jobs than any other industry, according to the U.S. Census Bureau. A survey from the National Restaurant Association in June showed food service lost nearly $120 billion in sales during just the first three months of the pandemic.
In addition to the grim reality for restaurants, bars and clubs have endured an especially high closure rate as a result of coronavirus.
The bar and nightlife industry, which is six times smaller than the restaurant industry, tallied 5,454 total business closures — 2,429 of which are permanent — according to Yelp.
Despite the devastating dining numbers, the popular online business directory site and app also reported some encouraging data on spending behavior in the restaurant category.
Since June 1, Yelp saw consumer interest rise in steakhouses, French food, live and raw food, as well as German cuisine.
Yelp users have also shown increased interest in alcohol-related experiences with breweries up 24% and wineries up 51%.
Additionally, user interest in Black-owned businesses has remained high since Yelp’s Local Economic Impact Report last month, with searches for the category up 2,508% on the platform.