AP Photo
- 60% of businesses that shut down in the US from the start of the pandemic as of August 31 won’t be reopening, Yelp said Wednesday.
- As of 31 August, 163,735 US businesses have shut down, a 23% rise since mid-July.
- Yelp said the restaurant industry was most heavily affected with closures totalling 32,109 as of August 31.
- Visit Business Insider’s homepage for more stories.
COVID-19 is continuing to cripple the economy as 60% of US businesses that have been shut since the start of the coronavirus pandemic won’t ever reopen, according to the latest Economic Impact Report by Yelp.
The report, published on Wednesday, said a total of 163,735 US businesses have closed since the beginning of the pandemic as of August 31, marking a 23% increase since July 10.
Yelp’s report uses March 1 as the starting point for the pandemic, and calculates closures from this date.
Read more: A Wall Street firm says investors should buy these 15 cheap, high-earning stocks now to beat the market in 2021 as more expensive companies fall behind
Yelp said both permanent and temporary closures are rising across the nation, and 97,966, or 60%, of those closed businesses will not reopen.
Yelp said certain sectors have weathered the pandemic better than others.
"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,"Justin Norman, vice president of data science at Yelp, told CNBC.
According to the report, towing companies, plumbers and contractors, in particular, have maintained a low rate of closures, with only six to seven out of every thousand businesses closed.
The share of consumer interest in home and local services rose 24% between March 1 and August 31, relative to all categories on Yelp, compared to the same time last year.
"Some business sectors have been able to weather the COVID-19 storm particularly well. In general, professional services and solo proprietors as a whole have been able to maintain a relatively low fraction of closures since March 1," the report added.
This group includes those professions where working from home is possible, such as lawyers, real estate agents, architects, and accountants – all with only two to three out of every thousand businesses closed, as of August 31.
Yelp said the restaurant industry was the most heavily affected, with closures totalling 32,109 as of August 31 and 61% of those will become permanent.
The bars and nightlife industry is 6 times smaller than the restaurant sector, but 54% of those businesses won't reopen.
Yelp said the share of permanent closures within bars and nightlife has risen by 10% since it published its Economic Average Report in July.
Closures in the retail sector were closely in line with the restaurant industry as 58% of businesses that closed in the retail sector will be reopening, Yelp said.
Yelp's findings come even though the overall health of the US economy has rapidly improved after experiencing its worst drop between April and June. But most recent data shows over 13 million Americans are still out of work.
Yelp's report said Hawaii, California and Nevada faced the highest rate of total closures and permanent closures and as they were also the three states to face the highest levels of unemployment.