Yelp Releases Local Economic Outlook for Q1 2018
February 06 2018 - 9:00AM
Business Wire
American Diners Show Increasing Taste for
Independent Restaurants Nationwide
Yelp Inc. (NYSE: YELP), the company that connects people with
great local businesses, today announced the second edition of the
Yelp Local Economic Outlook, a program to rank U.S. metro areas by
the pace of local-business population growth to reveal the health
of urban economies around the country.
In an effort to look more closely at the health of the
restaurant industry, Yelp also analyzed review ratings, an
indicator of consumer sentiment, for independent and chain
restaurants in the 50 cities included in the Outlook. Findings of
Yelp’s restaurant industry analysis point to a major shift in
consumer perception of restaurants. Largely fueled by celebrity
chef-owner obsession in popular media and increased consumer
confidence in non-chain restaurants because of review platforms
like Yelp, there has been a tremendous rise in independent
restaurants over the last five years.
Alternatively, fast-food chain restaurants have seen a notable
decrease in average ratings over the last five years, by about
one-third of a star, on a scale of 1 to 5 stars -- equivalent to a
loss of about 16 percent of their average rating. Fast-casual chain
restaurants have also experienced a decline in ratings, by about
one-tenth of a rating point on average between 2012 and 2017.
While chain restaurants across the country encounter
increasingly choosy diners, independent fast-food and fast-casual
restaurants have seen a continued increase in average ratings,
improving by 7 percent in the last five years. Ratings for
casual-dining chain restaurants held up better, unchanged on
average, though they lagged behind their independent competitors,
which gained a quarter of a rating point between 2012 and 2017.
With 142 million rich, local reviews as of Q3 2017, Yelp is
putting its massive data stores to work identifying the parts of
the country and types of business with the highest rate of growth.
The Yelp data science team is continually working to identify the
best measure of local economic health. For this quarter, Yelp
highlights the rate of change in the number of businesses in a
city, neighborhood, or business category as a way to equally weight
business closures -- a sign of economic challenges -- and business
openings, a sign of business investment and dynamism.
“Entrepreneurs are investing in opening businesses throughout
the southeast and southwest, buoyed by booming populations and
economies,” Yelp data science editor Carl Bialik said. “The engine
of local economies is local business, and a growing business
population is a strong sign of economic health.”
In the fourth quarter of 2017, Charleston, S.C., topped the list
in business growth. In recent years, the Charleston region’s
economy has been growing much faster than the national average.
Construction, driven by rapid population growth and a housing boom,
is a main driver of this growth. Meanwhile, San Jose, Calif., had
the lowest rate of change in number of local businesses, reflecting
the tough business climate -- sky-high rents and resulting pressure
on wages -- in and around Silicon Valley.
Yelp’s goal in publishing this Outlook is to help policymakers,
researchers and business owners better understanding local
economies in which they operate. Yelp’s full Local Economic Outlook
report can be downloaded at
www.yelpblog.com/2018/02/yelps-local-economic-outlook-american-diners-show-increasing-taste-for-independent-restaurants-nationwide
Ranking 50 Cities in America for Economic Opportunity
Current Rank City Year-Over-Year Change in Rank
- Charleston, SC
- Phoenix, AZ
- Salt Lake City, UT
- Orlando, FL
- Honolulu, HI
- Houston, TX
- Nashville, TN
- Austin, TX
- Omaha, NE
- Atlanta, GA
- Tulsa, OK
- Richmond, VA
- Louisville, KY
- Dallas, TX
- Portland, ME
- Miami, FL
- Denver, CO
- Seattle, WA
- Tampa, FL
- Tucson, AZ
- Columbus, OH
- Sacramento, CA
- Memphis, TN
- Los Angeles, CA
- Charlotte, NC
- Jacksonville, FL
- Albuquerque, NM
- Hartford, CT
- Las Vegas, NV
- Buffalo, NY
- Rochester, NY
- Pittsburgh, PA
- Washington, DC
- Cleveland, OH
- New Orleans, LA
- Providence, RI
- Cincinnati, OH
- New York, NY
- Boston, MA
- Minneapolis, MN
- Milwaukee, WI
- Saint Louis, MO
- Madison, WI
- San Diego, CA
- San Francisco, CA
- Philadelphia, PA
- Chicago, IL
- Baltimore, MD
- Portland, OR
- San Jose, CA
Methodology
On the Yelp data science team, we’re continually working to
identify the best measure of local economic health. For this
quarter, we’re using the rate of change in the number of businesses
in a city, neighborhood or business category as a way to equally
weight business closures -- a sign of economic challenges -- and
business openings, a sign of business investment and dynamism. This
method places a greater weight on business openings than the
scoring used for the inaugural LEO rankings released in October.
While the change makes the rankings we’re releasing today not
directly comparable with the October list, we think it is a marked
improvement because of the importance of business openings as a
signal of economic health. We’ll continue to study and refine this
measure in the quarters to come as we release further updates on
local business health.
About Yelp Inc.
Yelp Inc. (NYSE: YELP) connects people with great local
businesses. Yelp was founded in San Francisco in July 2004. Since
then, Yelp communities have taken root in major metros across 32
countries. By the end of Q3 2017, Yelpers had written approximately
142 million rich, local reviews, making Yelp the leading local
guide for real word-of-mouth on everything from boutiques and
mechanics to restaurants and dentists. Approximately 30 million
unique devices* accessed Yelp via the Yelp app, approximately 74
million unique visitors visited Yelp via mobile web** and
approximately 84 million unique visitors visited Yelp via
desktop*** on a monthly average basis during the Q3 2017. For more
information, please visit http://www.yelp.com or send an email to
press@yelp.com.
* Calculated as the number of unique devices accessing the app
on a monthly average basis over a given three-month period,
according to internal Yelp logs.
** Calculated as the number of "users," as measured by Google
Analytics, accessing Yelp via mobile website on a monthly average
basis over a given three-month period.
*** Calculated as the number of "users," as measured by Google
Analytics, accessing Yelp via desktop computer on an average
monthly basis over a given three-month period.
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Yelp PressLiina Potterpress@yelp.com
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