Yelp suggests that openings are being driven by new businesses looking to adapt to the pandemic.

By Mike Pomranz
October 27, 2020
Advertisement

The COVID-19 pandemic has been devastating for the economy—and especially for the hospitality industry. But any sort of upheaval also creates opportunity: entrepreneurs looking for new and better ways to fit into an altered marketplace. We’ve already seen this in the coronavirus era: For instance, chains that were already well-positioned for delivery and takeout have been in better shape than more traditional sit-down restaurants. And surprisingly, according to a new report from Yelp, that desire to adapt means that the number of new restaurant openings in 2020 actually isn’t far off—and in some cases even surpasses—the number of openings from 2019.

Credit: Thana Prasongsin/Getty Images

Citing data from their Q3 Economic Average report, Yelp explains that, overall, this past September saw only 100 fewer new restaurant openings than the same month in 2019. And looking at the entirety of the third quarter, new restaurants openings are only down 10 percent from last year. Yelp’s data even shows that though restaurant and food business openings bottomed out in April, by August and September, new openings were actually above where they were in 2016, 2017, and 2018.

How’s that possible? Yelp suggests that some types of food businesses have seen surges as a direct reaction to our “new normal.” New Q3 openings were up for open-air options like food trucks and farmers markets, while Yelp writes that a year-over-year boost in the number of new pop-up restaurants and seafood markets demonstrates new businesses “catering to consumers' interests in novel ways to dine and shop for food outside of traditional restaurant experiences.” And speaking of novelty, Yelp also found an increase in new food businesses that focused on “celebratory treats that are often enjoyed at home or purchased as gifts, including cupcakes, custom cakes, and desserts.” Again, if more people are coping with the stress of 2020 with sugary treats, someone has to fill that increased demand.

“Business owners have proven their resilience throughout the course of this pandemic. Many have been able to successfully reopen and keep their doors open by quickly innovating and adapting new operating models to serve their customers,” Justin Norman, Yelp’s vice president of data science, said in announcing this new Yelp Economic Average report. “Restaurants in particular have been tested in the last six months, but we’re now seeing new restaurant and food business openings align with opening rates from previous years. In what at times seems like a never-ending stream of challenges for business owners, it’s encouraging to uncover these bright spots in the local economy.”

That said, this surge in new openings also corresponded with good weather, and Yelp points out that outdoor dining has been a huge summer trend. “In Q3 2020, the share of U.S. restaurant reviews mentioning ‘outdoor dining’ was more than double the share in Q3 2019. And the share of U.S. restaurant searches using the ‘outdoor seating’ filter on Yelp was up more than 5X compared to the same time last year,” the report states. “Similarly, review mentions for ‘street dining’ increased 5X between Q3 and Q2 2020.”

With a resurgence in COVID-19 cases across the county and the cold weather of winter looming, it will be interesting to see if Yelp’s Q4 report will merit as much positive news as this one.