More Temporary Coronavirus Business Closures Turning Permanent, Yelp Reports

A Yelp analysis indicated Wednesday fewer businesses are closing temporarily as a result of the coronavirus pandemic, but permanent closures are growing. At the same time, data indicated the number of COVID-19 cases increased as consumer interest in restaurants, bars, nightlife and health clubs rose.

U.S. cases of coronavirus began surging as states lifted restrictions imposed in the early days of the coronavirus pandemic, especially in the South and West where instances initially were low in the spring and restrictions were lifted rapidly.

The U.S. has recorded nearly 3.9 million coronavirus infections and nearly 142,000 deaths from COVID-19. Nearly 58,000 new cases were reported Tuesday along with more than 470 deaths.

Yelp reported in April 175,000 businesses had closed because of pandemic lockdowns. As of July 10, that number fell to 132,000, indicating only 24% of those businesses had reopened. And although temporary closures are falling, permanent closures are growing, accounting for 55% of all closures since March 1.

“Arizona, Texas, and Florida have started to see a recent increase in temporary closures due to spikes in COVID-19 cases. Meanwhile, California, Texas and New York have the highest total number of closures,” the report said, adding the restaurant industry accounted for the highest number of closures.

Of the 26,160 closed restaurants and bars in July, 15,770 have closed permanently.

Among retail businesses, 29% of the 26,119 closures are permanent.

The National Retail Federation reported last week that though retail sales figures in June were encouraging, spikes in coronavirus cases could wreck the recovery.

“How durable the improvement in retail spending will be is directly related to how widespread the resurgence in COVID-19 cases becomes,” NRF chief economist Jack Kleinhenz said in a press release. “All eyes are on the infections that are accelerating in many parts of the country and they pose a serious threat to recovery.”

Retail sales for June were up 7.5% compared to 18.2% in May, the Census Bureau reported. Restaurant and bar sales for June totaled $47.4 billion, $18 billion under prepandemic levels, the National Restaurant Association reported.

Yelp data indicated the 10 states with the largest increases in COVID-19 cases in June and significant increases in consumer interest in restaurants, bars and nightlife, and gyms were Florida, Idaho, Nevada, Oklahoma, South Carolina, Arizona, Texas, Georgia, Kansas and Alabama.

Massachusetts, Michigan, the District of Columbia, New York, Connecticut, Maryland, New Hampshire, Rhode Island, Virginia and Illinois not only had the largest decreases in COVID-19 cases but showed flat interest in restaurants, bars, nightlife and health clubs.

Yelp said there also has been a shift in consumer trends since May. Interest in alcohol-related activities is up while grocery interest is down. Formal wear and bridal shops also saw growing interest, as is axe throwing, escape games and boxing.

Additionally, there is growing consumer interest in urgent care and emergency rooms.