Yelp says 55% of U.S. business closures permanent

More than half of the U.S. businesses that closed temporarily at the start of the coronavirus pandemic will remain that way, according to Yelp’s Economic Average report released Wednesday.

Of the 132,580 total businesses that have closed their doors, 55% are permanent, an increase of 14 percentage points from June, Yelp reported.
The largest number of closures were reported in California, New York and Texas.

Restaurants accounted for the largest number of permanent closures, recently surpassing retail. The salon and beauty industries, bars and nightlife and fitness centers were also hardest hit with permanent closures. Only 24% of businesses reported closed in April have reopened, the report said.

“While we can’t say for sure what the trend will look like, we do know that businesses face a tough road ahead of them,” Justin Norman, Yelp’s vice president of data science, told Forbes. “Businesses will need to focus on effectively communicating the health and safety protocols they’re taking, continuing to innovate on new ways to interact with and serve customers, as well as take advantage of any government assistance that’s available.”

The upside is that Black-owned businesses are experiencing a surge in demand amid the protests sparked by George Floyd’s death on Memorial Day. From the day of his death on May 25 until July 10, there were more than 2.5 million searches for Black-owned businesses on Yelp, compared to about 35,000 over the same period last year — a whopping 7,043% increase.

Mr. Norman said he expects the trend to continue for Black-owned businesses.

“There has been sustained interest in Black-owned businesses since the initial peak at the end of May and beginning of June, and this interest is diversifying past the initial generic searches for Black-owned businesses and restaurants into a wider range of business types,” he told Business Insider. “To me, this signals a shift in consumer behavior and habit that I expect will continue.”