The report found consumer interest in all types
of local businesses plummeted across the nation, Los Angeles
suffered the most business closures, and the economic impact to New
York equates to that of eight Hurricane Sandys
Yelp Inc. (NYSE: YELP), the company that connects people with
great local businesses, today released first quarter data for the
Yelp Economic Average (YEA) report, a benchmark of local economic
strength in the U.S. Given the unprecedented changes brought by the
coronavirus (COVID-19), the report has been adapted to reveal the
dramatic shifts we’re currently seeing in local economies through a
variety of indicators since the start of 2020. YEA found that
business closure rates rose by 200% or more in metros and states
across the U.S and consumer interest in local businesses fell, by
50% or more in many categories, in a span of two weeks. The report
also observed that some businesses saw a surge in interest,
including fitness and exercise equipment (up 437% in seasonally
adjusted share of relevant page views, reviews, and photos since
March 10), community-supported agriculture (up 407%), and guns and
ammo (up 191%).
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20200428005293/en/
The Q1 Yelp Economic Average takes a
holistic look at the local economic changes since the start of
2020. (Graphic: Business Wire)
YEA reflects data from millions of local businesses and tens of
millions of users on Yelp’s platform. To accommodate this past
quarter’s report, Yelp measured business closures; consumer
interest, behavior, searches and reviews; and perspective on how
local economic impact compared to previous natural disasters in the
U.S. According to researchers, Yelp provides a timely and accurate
measure of a huge swath of the economy that is often missed by many
major indicators.
“In 15 days, the economy transformed as much as it had in our
prior 15 years of operation, combined,” said Carl Bialik, Yelp’s
data science editor. “This quarter has been unlike any other as
businesses suddenly closed nationwide, consumer interest plummeted,
businesses overhauled their business models, and workers and
consumers changed lifelong habits overnight. Between March 10 to
March 21, one of the hardest hit categories was bars and other
nightlife businesses, which declined in consumer interest by 81%.
Salons and other beauty businesses were down 77%, hotels and other
travel businesses were down 75%, and restaurants were down
52%.”
Business Closures Rise Nationwide, Across Metros and
Categories
YEA found the rate of closures nationwide, and so many other
indicators of local economic strength, sharply turned during the
second and third weeks of March as warnings gave way to
shelter-in-place orders and other governmental measures to curb the
pandemic. On or around March 16, closure rates increased by two to
four times, and have remained at that new, elevated rate.
Since March 1, more than 175,000 businesses have been marked on
Yelp as shut down, temporarily or permanently. The Los Angeles
metro area saw the largest number of closed businesses, followed by
New York and Chicago. Seattle and San Francisco have had the
highest rate of business closures, as a share of all businesses,
among major metros, while Philadelphia and Miami have the lowest
rate of business closures among major metros. The businesses marked
as closed include more than 48,000 shopping establishments, 30,000
restaurants, and 24,000 spas and other beauty businesses.
The Local Economic Impact Equivalent of Several Major
Hurricanes
YEA analyzed how consumer interest in local businesses during
COVID-19 compared to the economic impact of other U.S. natural
disasters. The New York metro area experienced the equivalent of
eight Hurricane Sandys. The Houston metro area was hit by the
economic equivalent of four Hurricane Harveys, Miami by four Irmas,
and New Orleans by four Isaacs. The report found that hurricanes
were the closest precedents in economic impact, with the largest
immediate effect among other economic shocks.
Consumers Moved Fast, Often Ahead of Their
Governments
Consumer activity turned steeply downwards on (or around) March
11 across nearly all 50 states no matter what measures local
governments had or had not implemented at that time. Notably,
consumers often were out in front of their leaders: New Yorkers’
search behavior started to reflect the new reality on March 11, two
days before Californians’ and 11 days before New York Gov. Andrew
Cuomo ordered his state’s residents to stay home.
Business Owners Adapted, and Some Saw Demand Increase
The data showed how some businesses were unusually well-suited
to meet the needs of customers stuck at home, and how others
adapted with virtual services, delivery, and even shifts to their
business model. Fitness & exercise equipment (up 436% in
seasonally adjusted share of relevant page views, reviews, and
photos since March 10), cosmetic and beauty companies (up 139%),
pizzerias (up 71%) and chicken-wing joints (up 84%) were all able
to quickly pivot to abide by stay-at-home orders.
As people stopped dining out at restaurants, the ratio of
searches for dining-in to dining out increased by 300 times in a
few weeks. At the same time, many high-end restaurants and cocktail
bars quickly pivoted to prepare takeout options. Other businesses
such as photographers, art teachers, fitness instructors, and party
planners all have found new ways to continue to operate while still
respecting social distancing measures.
Consumer Behavior Was Consistent Across Political
Parties
Although some polls have shown Americans’ attitude toward the
virus differed by political affiliation, our data suggests
otherwise. By state, metro, or county, businesses and consumers
responded in much the same way, irrespective of local
circumstances, including which political party holds sway over
local offices or how the state voted in the 2016 presidential
election.
Support for Local Businesses Surfaces in Searches and
Reviews
Consumer behavior changed as rapidly as businesses have had to
adapt. The report found that searches for flowers were at
near-Valentine’s Day levels — with particularly elevated interest
in the Northeast and Great Lakes regions. People have also started
noting the health measures taken by establishments and by their
fellow consumers with mentions of sanitizer, gloves, and phrases
related to keeping physical distance from each other rising in the
second week of March. Mentions of masks rose steeply after the
federal government recommended their usage for all Americans, but
the rate of review mentions had been rising steadily
beforehand.
Reviewers also increased their usage of several phrases touching
on support of businesses: supporting restaurants, supporting their
favorite businesses, and supporting locally. Physical-distancing
requirements led to the steep decline in mention of service staff,
dropping off to mentions by under 2% of reviewers from a typical
rate of over 10%. Consumers are now interacting with service staff
less and instead adopting other ways of transacting, such as
curbside pick-up or contact-less delivery. By the end of March,
roughly one in six reviewers each day mentioned phrases related to
the coronavirus at a high rate rarely seen for other types of
phrases in Yelp’s reviews.
See all of our Yelp Economic Average reports, how we calculated
Q1 2020 YEA, and other resources at yelpeconomicaverage.com. Yelp
is regularly updating its Coronavirus Economic Impact Report to
outline how local economies continue to fare in these uncertain
times.
Please find more assets and images here. For more information
and Yelp’s latest company metrics, visit:
https://www.yelp-press.com/company/fast-facts/default.aspx
Methodology
Business Closures
On each date, starting with March 1, we count U.S. businesses
that were open on March 1 and were closed on that day. Closure can
be permanent or temporary, and is signaled by a business owner
marking the business as closed, including by changing its hours or
through a COVID-19 banner on its Yelp page. Closure counts are
likely an estimate of the businesses most impacted, with many
others not counted because they remain open with curtailed hours
and staffing, or because they have not yet updated their Yelp
business pages to reflect closures. Closures are counted by state,
metro area, and category; some businesses are in more than one
category. One-day closures that appear to be unrelated to the
pandemic, such as for Easter, are not counted.
Consumer Interest Changes By Political Party
We measure consumer interest by page views, and political
affiliation by 2016 presidential election results, using data from
MIT Elections Data and Science Lab. We aggregate consumer interest
and political affiliation at the county level and then by business
category. We compute the relative changes of page views with
respect to March 10. Then within each category, we compare these
relative changes along the temporal and the political
dimensions.
When Consumers Changed Their Behavior
The turning points for consumer behavior by state is measured
using seasonally adjusted daily search volume. The overall period
of change is the period in which daily search volume was
continuously falling. The period of rapid change shown in the chart
is the period between when search volume fell to 25% below its
initial level, and when it reached within 25% of the new
plateau.
Local Economic Impact
We measure daily consumer interest, in terms of daily U.S.
counts of a few of the many actions people take to connect with
businesses on Yelp: viewing business pages or posting photos or
reviews. By metro area (core-based statistical areas), we compare
daily consumer interest with the level expected based on a forecast
model accounting for seasonal, day-of-week, holiday, and other
underlying trends.
We then use this model to identify anomalous events that cause
the actual activity to deviate significantly from the expected
level. The beginning of each event is defined to be one day before
the day on which user activity first deviates more than 10% from
the normal level. We say the event “ends” when activity has
returned to roughly the expected level for several days. We start
tracking the effect of the pandemic on March 9 for each
location.
The total impact of the event is the total difference between
expected and actual activity for the duration of the event’s
impact. For example, if during a hurricane we see a daily average
of 25% less activity than expected over 10 days and during the
pandemic we see a daily average of 50% less activity than expected
over 40 days, we would say that the pandemic had eight times the
economic impact of the hurricane: twice the daily impact, for four
times as many days.
Consumer Interest By Business Category
We measure daily consumer interest, in terms of seasonally
adjusted daily U.S. counts of a few of the many actions people take
to connect with businesses on Yelp: viewing business pages or
posting photos or reviews. We start with the biggest U.S.
categories by consumer actions. Among those, we select the biggest
gainers and biggest decliners in terms of their seasonally adjusted
share of all root category consumer actions since March 1. Then we
choose representative ones to show the trend, which we’re charting
from March 1 through April 19.
Searches and Reviews
We look for phrases whose frequency in daily and weekly mentions
in search queries or users’ reviews changed significantly, grouping
related terms. For reviews, we evaluate the increase or decrease in
frequency of users who use a specific word or phrase since February
2020. For search queries, we compare frequencies of search terms to
all queries over the same weeks this year and last year to identify
the largest changes. We aggregate searches by state to identify
trends in specific localities, and compare the frequency of
mentions of celebrations to the frequency of mentions of illness or
death in recent florist reviews, to understand the reasons for
increased search frequency in flower delivery.
About Yelp Inc.
Yelp Inc. (www.yelp.com) connects people with great local
businesses. With unmatched local business information, photos and
review content, Yelp provides a one-stop local platform for
consumers to discover, connect and transact with local businesses
of all sizes by making it easy to request a quote, join a waitlist,
and make a reservation, appointment or purchase. Yelp was founded
in San Francisco in July 2004. Since then, Yelp has taken root in
major metros in more than 30 countries.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200428005293/en/
Yelp Inc. Julianne Rowe jrowe@yelp.com
Yelp (NYSE:YELP)
Historical Stock Chart
From Aug 2024 to Sep 2024
Yelp (NYSE:YELP)
Historical Stock Chart
From Sep 2023 to Sep 2024