STUDY: New Business Openings Accelerate in Q1
Yelp Inc. released first quarter 2021 data for the Yelp Economic Average (YEA) report, a benchmark of local economic strength in the U.S. The Q1 2021 YEA shows strong signals of local economic recovery with more new businesses opening than at any other period over the last 12 months and business reopenings at the highest level since Q2 2020.
YEA found that more than half a million new businesses opened in the U.S. in the last year (April 1, 2020 - March 31, 2021), down by only 11% year-over-year (YoY). New business openings spiked in Q1 2021, with restaurant and food business openings, as well as home, professional, local and auto services openings above Q1 2020 levels. Business reopenings are also rising across the country with reopenings in each month of the first quarter the highest they have been since Q2 2020.
New Restaurants
In the last 12 months, Yelp data reveals there were 516,754 new business openings in the U.S. (April 1, 2020 through March 31, 2021), down by only 11% YoY. Of the newly opened businesses, 69,001 were restaurant and food businesses, down by 14% YoY.
Though local businesses are still experiencing continued challenges and capacity restrictions, Yelp data shows that more new businesses opened in the U.S. during the first quarter of 2021 than at any other period over the last 12 months. With 146,486 total business openings in Q1 2021, the level of new openings is comparable to years prior, down by only 2% year-over-year (YoY) and up by 4% from Q1 2019.
During the first quarter, restaurant and food business openings (18,217) were up by 5% from Q1 2020 and down by only 4% from Q1 2019.
Nearly every state in the U.S. saw an increase in new openings in Q1 2021, compared to Q4 2020.
Read the full report, as well as previous YEA reports, at yelpeconomicaverage.com. Assets and images from the Q1 2021 YEA report can be found here. For more information and Yelp’s latest company metrics, visit: https://www.yelp-press.com/company/fast-facts/default.aspx
Methodology
New Business Openings
Openings are determined by counting new businesses listed on Yelp, which are added by either business owners or Yelp users. Openings are adjusted year-over-year, meaning openings are relative to the same period of time in the previous period for the same category and geographic location. This adjustment corrects for both seasonality and the baseline level of Yelp coverage in any given category and geography.
Business Reopenings
On each date, starting with March 1, 2020, Yelp counts U.S. businesses that were temporarily closed and reopened through March 31, 2021. A reopening is of a temporary closure, whether by using Yelp’s temporary closure feature or by editing hours, excluding closures due to holidays. Each reopened business is counted at most once, on the date of its most recent reopening.
Openings and reopenings are based on when they're indicated on Yelp, as such, the data may lag slightly from the true opening or reopening date due to a delay in reporting from consumers and business owners.