Amid inflation and rising gas prices, in Q2
consumers seek fewer higher-priced businesses and turn to electric
vehicles
In the first half of 2022, consumers are
booking reservations further in advance than ever before
Yelp Inc. (NYSE: YELP), the company that connects people with
great local businesses, today released second quarter 2022 data for
the Yelp Economic Average (YEA) report, a benchmark of local
economic strength in the U.S. The Q2 2022 YEA report reveals
consumers are experiencing inflation at record rates, with review
mentions of inflationary language up by 28% compared to Q2 2021,
and up by 33% compared to the same time period in 2020.
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the full release here:
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The Q2 Yelp Economic Average finds
consumers are experiencing inflation at record rates. (Graphic:
Business Wire)
For the first time, Yelp found that consumers are reporting
experiences of shrinkflation in reviews published in Q2 2022. In
response to rising gas prices, Yelp data in the second quarter also
points to a nearly two-fold increase in searches for electric
vehicles compared to Q2 2021. While fewer consumers sought out
higher-priced businesses than earlier in 2022, according to Yelp
data, people are still looking for more expensive businesses
compared to pre-pandemic. In the first half of 2022, they’re also
waiting longer than ever to get a reservation at restaurants.
“Despite rising inflation, activity on Yelp suggests that
consumer spending remains strong as people search for higher-priced
businesses more frequently than prior to the pandemic,” said Pria
Mudan, data science leader at Yelp. “However, that doesn’t mean
consumers and businesses aren’t feeling the pinch of inflation. We
saw reviewers use inflation-related language at record levels,
particularly in the dining, arts and entertainment and travel
categories. And for the first time, reviewers are describing
shrinkflation-related experiences where the size or quantity of
goods are noticeably smaller, which is most referenced at
restaurants serving more affordable fare.”
Consumers Report Inflationary Experiences at Record
Rates
While inflation has been rapidly increasing since 2021,
consumers have especially experienced inflation at an increasing
rate in 2022, as mentions of inflationary language in Yelp reviews
are up 7% in Q2 compared to Q1 of this year. When compared to Q2
2021, consumers are experiencing inflation most at more casual
restaurants (up 38%) and food businesses (up 36%), followed by arts
and entertainment (up 33%), nightlife businesses (up 30%), event
services (up 22%), and hotel and travel businesses (up 20%).
However, inflation has not been felt equally across the U.S. In
Q2 2022, 47 states (including Washington D.C.) saw an overall
increase of inflation mentions in Yelp reviews compared to Q2 2021
– with 35 states seeing more than a 25% increase of inflation
mentions. Six of the top 10 states with the highest inflation
experiences are in the Northeast, including Massachusetts, New
York, Maine, Washington D.C., New Jersey and New Hampshire.
Consumer Searches for Higher Priced Businesses Fell, Yet
Remain Above Pre-pandemic Levels
In Q2 2022, the share of all searches on Yelp using the
inexpensive “$” filter increased by 7% compared to Q1 2022, while
the share of the highest “$$$$” filter had decreased by 12%. While
quarter-over-quarter consumers are generally searching for
lower-priced businesses, when compared to pre-pandemic levels (Q2
2019), consumers still searched for higher-priced businesses more
frequently in the second quarter of this year. Searches on Yelp
using the highest “$$$$” filter increased up by 55% in Q2 2022
compared to Q2 2019, whereas the use of the inexpensive “$” filter
decreased by 24%. While restaurants, food, and travel and hotel
searches reflect a similar trend, auto services searches oppose the
trend.
Consumers are Booking Reservations Further in Advance Than
Ever Before
In Q2, the average time elapsed between booking a reservation on
Yelp and the reservation date was 3.3 days – a 14% increase in time
compared to Q2 2021 and 40% more than pre-pandemic (Q2 2019).
Up-and-coming and growing cities saw the largest increase in the
average time between booking a restaurant reservation and the date
of the reservation in Q2 compared to pre-pandemic: Birmingham, AL;
Jacksonville, FL; Grand Rapids, MI; Lancaster, PA; High Point, NC;
Austin, TX and Nashville, TN.
The median wait time for Yelp Waitlist restaurants has also been
longer this year. The median wait time for a table in Q2 2022 was
35 minutes; whereas the median wait time in the same period in 2021
and 2020, was 22 and 16 minutes, respectively.
Consumers Turn to Electric Vehicles in Response to Raising
Gas Prices
Consumer searches for “electric vehicles'' (EV) were up 97% in
Q2 2022 from the year before, and up 175% compared to pre-pandemic
Q2 2019. Additionally, searches for specific EV models were up 63%
in Q2 2022 compared to Q2 2021, and up 118% from Q2 2019. EV
Charging stations also experienced a 23% increase in consumer
interest in Q2 2022 compared to Q2 2021.
Read the full Q2 2022 YEA report, as well as previous YEA
reports, at yelpeconomicaverage.com. Assets and images from the
report can be found here. For more information and Yelp’s latest
company metrics, visit:
https://www.yelp-press.com/company/fast-facts/default.aspx
Methodology
Review Text Mentions of Inflation We analyzed review text
from 2020 through Q2 2022 to observe how Yelp consumers are
referencing inflation in reviews. These inflation references can
include phrases mentioning inflation itself or higher or rising
prices at businesses. The volume of review text phrases are
normalized by the number of times per every million words the
phrases appeared in reviews, and is calculated for each Yelp
category and on a national and state basis. Changes in mentions are
on a year-over-year basis unless otherwise specified. A minimum
threshold of review mentions was implemented in nearly all states
to uncover the most noteworthy inflation experiences.
Price Range Filter Usage There are currently four pricing
tiers ($, $$, $$$ and $$$$) on Yelp and the pricing tier of a
business is voted on by Yelp consumer users (business users cannot
alter this information). Consumers can use the price range filter
when searching for businesses on Yelp. The share of different
pricing tiers used by consumers in Yelp search results signals
their general willingness to spend in various price ranges.
Reservation Booking Days in Advance and Wait Times We
used information from Yelp Guest Manager’s reservations and
waitlist services to analyze how far in advance consumers are
booking reservations and for how long they are waiting before being
seated. Reservation booking days in advance are given as monthly
averages, and wait times are given as monthly medians.
Electric Vehicle Search Text Mentions For the data
regarding electric vehicle mentions in searches, we measured the
share of every million Yelp searches that contained phrases related
to electric vehicles or specific models from electric vehicle
manufacturers. For “electric vehicle” related searches, we excluded
searches that were related to charging stations to better observe
interest in the vehicles themselves.
Consumer Interest We measure consumer interest by looking
at select actions users take in connection with businesses on Yelp:
such as viewing business pages, or posting photos or reviews.
Changes in consumer interest for each category were measured by
comparing year-over-year data from Q2 2019-2022, focusing on each
category’s share of all consumer actions in its root category.
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20220719006149/en/
Yelp Inc. Julianne Rowe press@yelp.com
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