60% of business closures due to the coronavirus pandemic are now permanent, Yelp data shows | Tech News

Since coronavirus emerged from Wuhan, China in December of 2019, the deadly virus has claimed almost 1 million lives and decimated thousands, if not millions, of businesses around the world. Here in the US, however, there is no hard data from the U.S. Department of Commerce to show how many businesses have been closed or the rate of closure.

However, we may be able to glean some insights from eCommerce sites like Yelp to see how well businesses are doing. Yelp is a review site that connects people with great local businesses. One can argue that no one knows about American businesses as Yelp does. Today, Yelp released its latest Economic Average Report, revealing business closures across the U.S. are increasing as a result of the coronavirus pandemic’s economic toll.

In its Q2 2020 Economic Average report, Yelp finds that increased consumer interest in May correlates with COVID-19 hot spots in June. The company also found that business closures fluctuate across the nation. 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.

“The curve in business closures that we once saw going down has continued to change over the last month. We last reported 140,000 total businesses closures on Yelp from March 1 to June 15. We saw this increase to more than 147,000 total business closures on June 29 and then drop again to just more than 132,500 total business closures as of July 10. This rapidly changing number of closures reflects rapidly evolving situations at the local level, as some states with rising cases start to close again, while others continue to reopen. In April, we reported more than 175,000 business closures indicating that only 24% of businesses that were closed in April have reopened.”

Yelp explained that “even as total closures fall, permanent closures increase with 72,842 businesses permanently closed, out of the 132,580 total closed businesses, an increase of 15,742 permanent closures since June 15. This also means that the percentage of permanent to temporary business closures is rising, with permanent closures now accounting for 55% of all closed businesses since March 1, an increase of 14% from June when we reported 41% of closures as permanent. Overall, permanent closures have steadily increased since the peak of the pandemic with minor spikes in March, followed by May and June.”

In addition to monitoring closed businesses, Yelp also takes into account the businesses whose closures have become permanent. That number has steadily increased throughout the past six months, now reaching 97,966, representing 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, said.

According to the report, Yelp found that the share of permanently closed businesses continues to rise. Below is a chart of “Share of business closures on Yelp that were temporary vs. permanent.”

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