Yelp Reports That 60% of Coronavirus Business Closures Are Now Permanent

COVID-related business bankruptcy blogYelp is a website best known for allowing customers to leave reviews for local businesses. However, Yelp can also analyze its data to reveal business trends. Business owners will list on Yelp when they are closed temporarily or permanently for their customers’ knowledge. Unsurprisingly, thousands of businesses reported closures due to quarantine and stay at home orders across the United States. Sadly, Yelp has now reported that the majority of these closures are now permanent. 

Yelp’s Data

Yelp’s Economic Impact Report contains data through August 31, 2020. The reported data is for businesses all across the United States. Yelp reported that approximately 180,000 businesses reported closures nationwide at the start of the pandemic. This has now decreased to 163,735 business closures after a temporary bump of reopenings in July 2020. Yelp also reported that 97,966, or 60%, of these closures have now been declared permanent. 

Differences Between States

While COVID-19’s effect has been fairly universal, some states have been hit harder from both a health and economic standpoint. Yelp has reported that the top 5 states with the most business closures are, in order, Hawaii, California, Nevada, Arizona, and Washington state. It is no coincidence that these states are home to major metropolitan areas and are also popular tourist destinations. Larger cities like Los Angeles and New York have reported far more permanent closures than small metropolitan areas like Pittsburgh and Philadelphia. 

Professional Services

Overall, Yelp’s data shows that even in states where stay at home orders have been loosened, people just aren’t comfortable going out in public (and spending money) as they used to be. However, professional services, while still possibly making less or struggling, have largely managed to remain in business. Contractors, lawyers, accountants, and similar types of professionals have reported relatively low closures. Despite reduced travel due to mass unemployment and remote work, towing services and mechanics also report low closure rates. Many businesses have been able to offer virtual and telephonic services, or have found a way to provide their services in an otherwise socially distanced manner. 


business bankruptcy due to COVID-19 blogRetail, especially fashion retail, is suffering due to the pandemic. Even home decor stores are reporting high closure rates despite increased time in the home. The current permanent closure rate for retail is 58%. This is reflected by the amount of household names in fashion retail that have filed bankruptcy during the pandemic. These include JC Penney, Neiman Marcus, J. Crew, Lucky Brand, Brooks Brothers, Men’s Wearhouse, True Religion, and more. 


Another industry particularly burdened by COVID-19 stay at home orders and reopening social distancing and sanitation guidelines is the beauty industry. Beauty businesses like hairdressers and nail salons have experienced a recent spike in closures, and the current closure rate for the beauty industry is 42%. 

Restaurants and Hospitality

Yelp has reported that this industry has been hit the hardest, with approximately 61% of restaurants closing permanently. As of August 31, 2020, that was a total of 32,109 restaurants. Restaurants focused on sit-down dining and ambience have higher closure rates, while restaurants amenable to take out and delivery, like coffee shops and pizza places, are faring slightly better. However, the biggest restaurant names to file bankruptcy so far have been pizza-based: California Pizza Kitchen, Chuck E. Cheese, and NPC International (which owns more than 1,200 Pizza Hut franchise locations). 

Nightlife venues have reported a permanent closure rate of 54%. This is a total of 6,451 businesses. This area is expected to continue to struggle due to social distancing guidelines and lack of discretionary income. 

Business Closures and Unemployment Rates

All of these permanent business closures also translate to sustained high unemployment rates. The U.S. Bureau of Labor Statistics released a report on September 4, 2020 containing data through August 31, 2020. Most of the states with the highest business closures also have the highest unemployment rates. Nevada currently has the worst unemployment situation with a rate of 13.2%. California and Hawaii have unemployment rates of 11.3% and 11.4% and rank 47th and 48th nationwide, respectively. Washington state is ranked 35th with an unemployment rate of 8.5%. Arizona, however, is ranked relatively high at 11th with an unemployment rate of 5.9%.