60% of business closures due to coronavirus now permanent: Yelp

By Blue Telusma

·September 16, 2020

LAS VEGAS, NEVADA - AUGUST 09: A "Going Out of Business" sign hangs outside a Pier 1 Imports store on August 9, 2020 in Las Vegas, Nevada. In February, Pier 1 Imports Inc. filed for Chapter 11 bankruptcy protection but was unable to secure a buyer due to the coronavirus (COVID-19) pandemic. In May, the home goods store received approval from the U.S. Bankruptcy Court to wind down its business. On July 31, Florida-based investment firm Retail Ecommerce Ventures (REV) finalized a USD 31 million purchase of the 58-year-old brand's intellectual property and e-commerce assets. REV plans to launch a new e-commerce business under the Pier 1 Imports name later this month. (Photo by Ethan Miller/Getty Images)

When the coronavirus pandemic was first announced many hoped that the disruption to the U.S economy would be temporary. But this week Yelp released an Economic Impact Report that reveals more than half the business closures across the nation have ended up being permanent.

According to CNBC, Wednesday, Yelp’s September report was released, which marks six months since March 1, the date that the company considers to be the start of the current business crisis.

FREEPORT, NEW YORK – MAY 20: A general view of a shuttered Pier 1 store on May 20, 2020 in Freeport, New York. Pier 1 announced yesterday that they are going out of business and closing all 540 stores. (Photo by Bruce Bennett/Getty Images)

While tracking business closures Yelp also monitored how many establishments went out of business entirely. Over the last six months those figures have skyrocketed, now reaching 97,966, which represents 60% of closed businesses that won’t be reopening.

“Overall, Yelp’s data shows that business closures have continued to rise with a 34% increase in permanent closures since our last report in mid-July,” Justin Norman, Yelp’s vice president of data science, told CNBC.

The latest report assessing COVID-19’s economic toll also showed that, “As of Aug, 31, 163,735 businesses have indicated on Yelp that they have closed. That’s down from the 180,000 that closed at the very beginning of the pandemic. However, it actually shows a 23% increase in the number of closures since mid-July.”

BROOKHAVEN, GA – APRIL 27: With some seats and booths marked off to adhere to social distancing protocol, customers enjoy dine-in and take-out service at a Waffle House on April 27, 2020 in Brookhaven, Georgia. Gov. Brian Kemp has allowed some non-essential businesses to start re-opening in Georgia amid the COVID-19 Pandemic. As of Monday, restaurants around Georgia are allowed to offer dine-in service. Non-essential businesses allowed to start reopening are restaurants, movie theaters, tattoo shops, salons, gyms and nail salons. (Photo by Jessica McGowan/Getty Images)

“Despite the hard hit small businesses have certainly taken, we’ve seen that home, local, professional and automotive services have been able to withstand the effects of the pandemic better than other industries,” Norman noted.

Due to social distancing mandates, many consumers are now confined to their homes, which has meant professional services such as landscapers, contractors and lawyers, are experiencing a much lower closure rate than retail outlets. Auto and towing services have also reported a comparatively low closure rate.

“Consumers still need these services,” Norman said. “Through the rise of virtual consultations, and contactless or socially distanced services, these businesses have been particularly resilient during this time.”

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