Yelp Economic Average Uncovers a Drop in Total Business Closures and a Rise in Permanent Closures During the Second Quarter - Seite 2

Considering states with at least three total cases per 1,000 population, the ten states with the largest increase in COVID-19 cases in June, including Florida, Nevada, South Carolina, Texas and Georgia, all saw a significant increase (more than 50%) in consumer interest in restaurants, bars and nightlife, and gyms, in May, relative to the shutdown level of activity in late March and early April. In the ten states with the largest decrease in COVID-19 cases in June, including Massachusetts, New York, Connecticut, Michigan and Maryland, consumer interest in the same activities remained more flat in May, increasing less than 50% relative to the shutdown in all ten states.

As outbreaks worsened through late June, consumer interest in these categories started to decrease in states like Florida, Texas, South Carolina, and Arizona — emphasizing the strong correlation between the pandemic and consumer behavior. When there's a major outbreak, Yelp data suggests it negatively impacts consumer interest in businesses where social distancing may be harder to enforce. Alternatively, if COVID-19 cases remain flat or decrease in a state, consumer behavior and local policies tend to revert towards the pre-pandemic norm, leaving the state vulnerable to another outbreak in the near future.

Business Closures Fluctuate Across the Nation

In June, Yelp’s Local Economic Impact report found a decrease in business closures with 140,000 permanent and temporary closures on Yelp from March 1 to June 15. This increased to more than 147,000 total business closures on June 29 and then dropped again to just more than 132,500 total business closures as of July 10. This rapidly changing number of closures reflects rapidly evolving situations at the local level, as some states with rising cases start to close again, while others continue to reopen. In April, Yelp reported more than 175,000 business closures indicating that only 24% of businesses that were closed in April have now reopened.

Even as total closures fall, permanent closures have increased to 72,842 businesses as of July 10, an increase of 15,742 permanent closures since June 15. Permanent closures now account for 55% of all closed businesses since March 1, an increase of 14% from June when Yelp reported 41% of closures as permanent.

Most states have seen a plateau of temporary closures, while Arizona, Texas, and Florida have started to see a recent increase again due to spikes in COVID-19 cases. California, Texas, and New York have the highest total number of closures (29,351, 11,118 and 8,731, total closed businesses, respectively). On a metro level, Las Vegas is suffering from the highest rate of permanently closed businesses with 861 businesses permanently closed, as the city reacts to a decrease in tourism. Meanwhile, Los Angeles has the most closures with 11,342 total temporary and permanent business closures.