Sixty percent of the business closures since the pandemic hit in March are permanent, according to online business reviewer Yelp.
As of Aug. 31, over 160,000 businesses had closed since March 1. Nearly 100,000 of them are permanent, Yelp reported Wednesday.
The restaurant industry is one of the sectors hardest hit as social distancing guidelines have made it a struggle for them to serve customers at a sufficient capacity.
Of the over 32,000 restaurants that have closed since the pandemic, roughly 20,000 of the closures are considered permanent, according to Yelp. That’s a 61% closure rate.
“Breakfast and brunch restaurants, burger joints, sandwich shops, dessert places and Mexican restaurants are among the types of restaurants with the highest rate of business closures,” the Yelp report states.
The retail sector, also hit hard by the pandemic, is not far behind the restaurant industry in terms of permanent closures. Over 30,000 stores have closed, with 17,500 of them being permanent. The retail sector has suffered at a 58% closure rate.
The business sectors that are surviving the pandemic are the ones able to work from home, do a majority of their work online, or can work easily under social distancing rules.
“Some business sectors have been able to weather the COVID-19 storm particularly well. In general, professional services and solo proprietors as a whole have been able to maintain a relatively low fraction of closures since March 1,” the report states.
This group includes lawyers, real estate agents, architects, and accountants, with only two to three out of every thousand businesses closed, as of Aug. 31.
Towing companies, plumbers, and contractors have also seen a low rate of closures, with only six to seven out of every thousand businesses closed.
“In fact, the share of consumer interest in home and local services is up 24% between March 1 and August 31, relative to all categories on Yelp, compared to the same time last year,” the business reviewer stated in its report.
Business closures are generally larger in states with high unemployment rates, such as Hawaii, California, and Nevada.
A likely contributor to the closures is the fact that several states continue to struggle to keep their economies open as they are forced to close businesses to slow the spread of the virus.
Another factor is the expiration of the $600 enhanced unemployment payment at the end of July. Without that payment, jobless workers receive roughly two-thirds less in benefits, making it hard to participate in commerce by purchasing items.
