Permanent business closures in US hit 60%, report says

Permanent business closures in US hit 60%, report says

The latest report from Yelp showed that business closures in the U.S. are further rising, while some sectors have weathered the pandemic better than others.

As most Americans continue to stay at home in fear of contracting the SARS-CoV-2, the virus that causes COVID-19 disease, the number of business closures both temporary and permanent are increasing as well.

Business closures continue to soar

Per a recent Yelp data titled Economic Impact Report, an estimated 163,735 businesses claimed that they have closed as of Aug 31. The number represents a 23% increased from July’s data as well.

On the flip side, businesses whose closures have become permanent has alarmingly climbed within the past six months. As of the report’s release date, permanent business closures have hit a total of 97, 966 (60%) of businesses across the country.

Permanent business closures in US hit 60%, report says

“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,” the vice president of data science at Yelp, Justin Norman, told CNBC.

Yelp analyzed the data through monitoring changes in business hours and descriptions on apps, which offers an instant view of how the health crisis is affecting businesses locally.

Yelp also used March 1 as the starting point and calculates business closures from the said date.

Some sectors weather the crisis better than others

Yet despite the crippling impact of the pandemic and rising business closures, some businesses weathered the crisis better than other sectors. The report showed professional services and sole proprietors, in general, are able to maintain a low rate of closures—plumbers, towing companies, and contractors, specifically.

Such services “have been able to withstand the effects of the pandemic better than other industries,” Norman told CNBC.

“Consumers still need these services,” he explained and added that due to the necessity of socially distanced and contactless services, such industries have been “resilient” amid pandemic.

Resto industry hit the hardest

But other industries were not able to withstand the economic impact of the pandemic.

Restaurants, bars, and other nightlife venues were hit the hardest particularly because of coronavirus restrictions. But according to the data, restaurants were the most affected among all sectors.

The number of restos that have closed, for example, has reached 32, 109 as of August 31. Those that have closed permanently, however, have reached an estimated 61%.

Permanent business closures under bars and nightlife industry hit 54% as well and have climbed as much as 10% since the release of the Economic Average report last July.

The retail sector has seen a similar trend as restaurants as well, with a 10% increase from July to an estimated 58% of permanent closures.

Images courtesy of Yelp: Local Economic Impact Report, Chris Panas/Pexels

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