Monday, July 6, 2020 - Yelp Restaurant Closure Data

Video Subtitles:

hi everyone happy Monday it's good to
see you all I am going to continue the
dignified hospitality series I don't
have any plan to guest today just fine
just me of course if you'd like to join
you're welcome good morning where are
you located that it's good morning for
you it's afternoon
I'm actually pretty late today I usually
come on a couple hours earlier but I had
to get a new modem for my internet my
had a power outage that costs my old
modem to crash out on you
but I have anyone else so I'm back
online so yeah today's information is
coming from a couple of different
articles not good news as one could
expect right now a conversation
regarding the pandemic in the restaurant
industry it's such a shame that the
restaurant industry has been hit so hard
by pandemic because there's a lot of
jobs a lot of jobs there a lot craft a
lot of arts that's not being appreciated
can't be safely appreciated right now so
you have the nature of these
conversations that I've been hosting on
every Monday for the past few months now
has been to move forward with some
manifesto and I'm sourcing you know the
ideas and the concepts for this
manifesto from the conversations that
are had through this series and you know
last week I had Stefan on he's been
running a podcast called surf conscious
for a couple of years now and so he's
been you know talking about these issues
for a while you know me I've just I've
just recently have jumped on to
this but you know in the in the nature
of his podcast he's not really talking
about what needs to be done on an
industry-wide standard he's mostly
talking about the individuals within the
system and how they can enrich their own
lives in their own career through
service a pointee mindfulness by being
you know a better way in a better life
through the service industry which i
think is incredible it's a conversation
that's not had enough people often think
of the service industry just as this
like temporary you know life building
step you know while you get to focus on
the thing that you are really passionate
about be it music or arts but no it's
dignified career providing sustenance to
the community is very dignified we can
pave a way forward and doing that of
course that is the responsibility of the
individual but as an employer as
restaurant owner or as a chef that's
managing a team kitchen there is a
benefit in creating a more hospitable
and dignified environment for your team
of course you're going to get more
skilled work you're gonna get a better
quality product and you know more
sustainable business which is in
jeopardy right now in the restaurant
industry is in jeopardy so this article
is some compiled data published on the
website restaurant dive and it's mostly
looking at the only so Yelp actually
Economic average they actually have
their own report it puts it up that's
nice
this is really good actually since this
website I'll go ahead and link this in
the comments so if you want to see this
and if you're on Instagram and I can't
give you the link right now this website
is called yell economic average and
that's where all this data is compiled
so this could be a cool little reference
just to stay updated on what's going on
in the industry at large so yeah it
looks like Yelp puts out this quarterly
and report it had put one out on April
28th but this one just published on June
25th maybe it's just updated so this
says as of June 15th there were nearly
140,000 total business closures on Yelp
since March 1st in April they reported
more than 175,000 business closures
indicating that more than 20% of
businesses closed in April have reopened
Las Vegas Nevada and during the highest
number of closures relative the number
of businesses in the city 1920 Wintel
closures while Los Angeles had the
largest total number of collisions
closures of 11,000 774 so I guess it's
per capita Las Vegas definitely did get
hit the hardest on this report is very
cool kind of showing you all the the
reopening of all business closures on
Yelp since March 1st 41% are permanent
so that's like really close to the
number that was originally forecasted
and we're still early on in the pandemic
as far as navigating I mean this is like
I'm sure we'll get down lower in the
report but and some of the other
articles that I've been reading that are
referencing this report
those writers are saying that regardless
of the states mandates like if the
restaurants could be open or not in in
restaurant dining is down across the
board and so you know that's why I say
you know this pandemic is not over and
the final results of these closures is
not known just yet
because that public sentiment about is
it safe to dine
do I feel comfortable dining that still
hasn't been resolved so even if the
state is allowing it in our own
president is hosting you know big
dinners people are still going to choose
to stay home and this is a big deal and
I feel like I don't know I wish I had a
friend on you know that owns a
restaurant that's gone through this
process already but I got missed here in
Vegas we've started to reopen and
everyday I'm seeing a new friend post oh
we're gonna have to be closed for the
next couple of days to disinfect the
space because one of our employees
tested positive so I think that's going
to be an ongoing thing that we're gonna
see across the industry just the odds of
it the odds of how the virus is
spreading you know and so that brings
into question is that the right protocol
if someone if an employee test positive
is that the right protocol of course
that's the right protocol for building
trusts in the community I feel like
that's what people are resonating with
when they see that online they're saying
yeah good for you thanks for being
proactive but that's a big issue for a
business running on small margins it was
one thing to shut down and to convert to
to go or convert to nothing and just be
shut down but to be shut down and then
reopen and then have to shut down again
so that can you know be very financially
dangerous
and really the only businesses that are
going to survive that type of trauma are
going to be the ones that are more
financially secure and so there is a lot
of pessimism that the mama Pop's are
gonna have a big struggle and surviving
this but I think like even even the
strong you know large centralized
organizations are still gonna struggle
with this especially if you're having to
close several times over and over the
problem is is that every time you shut
down you have to consider all of your
inventory that you have of your
ingredients of everything and if you
have to be shut for two or three days
then you're not going to be able to use
those things for two or three days so
you know that trauma happened at the
beginning of the pandemic and as long as
restaurants were shut down yes they
weren't having the revenue coming in to
pay their rents and whatever other
overheads they have but when they
reopened they had to restock all of
their ingredients and restock everything
and then if just a few weeks later
they're gonna have to close again
they're gonna have to go through that
cycle all over again so that scares me
actually I kind of feel like this cycle
of like opening closing opening closing
could be more detrimental to the
economics of restaurants then if a
restaurant was just commit you know to
finding a way to weathering the storm
without opening they're dying in so that
would be what take out which is on the
rise you know the the search results is
on the rise but there's other things to
do to innovative things and who knows
maybe it doesn't even have to do with
serving food to people it could be
something else
I'd love to hear some ideas if you guys
have been seeing anything in your own
networks or your own communities that's
impressed you about what some
restaurants have done to keep their
community engaged in as well as to
diversify their revenue streams to
support themselves during this difficult
time
I did good to see you speaking of
closure it's you see golden te cold tiki
had to close to sanitize everything I
would think golden te is a little bit
less challenged with this because it's
just a bar and you know if you stock all
of your beers and your your alcohols and
had to close you know you could still
save that and use that when you reopen
but this is mostly an issue for like
perishable food ingredients and whatnot
and not to mention the trauma to your
staff you know you get your staff all
wound up and excited about reopening and
you reopen and then three weeks later
you have to you have to reclose so you
know I maybe I'll have in a few more
weeks all all invites some of my friends
that have gone through these cycles and
seen ask them how's that yeah so the
highest rate of closures of business is
shopping in retail then restaurants than
beauty than Fitness retail was the
hardest hit experience in the heart
highest numbers of closures 35% of
retail businesses have indicated
permanent closures on Yelp so far
okay so now restaurants I don't I don't
get this with this chart so actually it
says that 53% of restaurants have
permanently closed since March 1st
53% permanently closed you know that and
and Jean he was on maybe three weeks ago
we were chatting and he was actually
optimistic about that saying yes this is
a large number of restaurants closed but
then that's also a larger opportunity
for entrepreneurs especially more micro
sized entrepreneurs to be positioned to
get into those kitchens at lower risk
you know which could make a huge
difference the difference of you know
typically before pandemic unless you got
really lucky and got like
second-generation kitchen you know
something that was already built and you
can just go it was very hard to do that
and the capital requirements to just
open a restaurant to even think about
opening a restaurant was at least two
million but then now you know if the
kitchens already retrofit and ready to
go then the capital requirement could be
as low as like twenty two hundred
thousand which you know ten to ten times
less money gives the chef and that
restaurateur a lot more power to run
their kitchens the way that they want to
versus being under the pressure of of
investors which you know a two million
startup project startup kitchen two
million dollars is a lot of money you
know and so you usually have to involve
investors to make that work
who keeps talking about innovation but
this is all just curse I pick up
interesting this this report even has
the increase of patronage of black owned
businesses and it shows it across states
so this is cool you can kind of see the
states that have the highest increase
it's hardly an increase though half a
percent one percent in Minnesota was one
point one percent which that makes sense
Michigan 0.92 percent increase I highly
recommend this report it's got a lot of
numbers
it even has talks about like lifestyle
changes outdoor activities have become
popular at the height of the pandemic as
people are finding ways to stay active
such as mountain biking Lakes golf
hiking I've dropped a consumer interest
since May first relative to their TVs
well maybe cuz it got too hot at least
here in Vegas that's the issue okay so
that's saying that these things are down
so mountain biking is down 40% against
down 28% but indoor activities have gone
up so escape games are up a hundred and
twenty eight percent go-karts are up one
hundred forty seven percent axe-throwing
is up 113 percent Jim's only at 81
percent and you'll get 42% so I guess
maybe the exercise is not as important
a previous spike in community supported
agriculture in grocery has started to
dip that's too bad yeah this reports
really good you know not to say that
Yelp is like the best source of data you
want to throw an axe Melissa they're
gonna they're gonna have the ax throwing
in the area of 15 right next to Tila if
you um if you're really into that I'm
not so into it I mean I'd be into I just
don't want to do it I'd do it maybe we
can do double this up they usually they
have like a streetcar to like our First
Fridays they'll come and park out in the
street and then let you do the throw the
ax throwing out on the street but area
15 should have all kinds of cool
activities I don't know when they're
gonna be safe to open I mean if the
casinos are all over now let's see why
area 15 wouldn't want to open just for
some context area 15 is alternative
amusement space here in Las Vegas that's
actually opening right next to Tila like
you can see it right outside the door
right now
and they're gonna have several different
immersive experiences events venues
spaces festival grounds and it's also
going to be home their anchor tenants is
mule wolf Neil wolf is an immersive arts
museum interactive psychedelic art
museum that popularized in Santa Fe New
Mexico but it's you know a lot of that
is based off of like sensory experiences
and being able to touch things and
interact with things so there's a lot of
discussion about how safe it will be to
explore that opportunity with the
pandemic going on and all of the risks
yeah I mean there's so much mystery
there
we have all the more reason to take it
seriously
maybe airborne now and restaurants are
like they're a big part of that you know
they have circulated air systems and
things could spread easily and the
people aren't wearing their masks well
they're eating so you know there's the
potential of things getting into the air
systems and getting spread so here says
during the peak of the pandemic the
number of diners seated across the Yelp
reservations and wait list
dropped essentially to zero that makes
sense and early June numbers of diners
seated are down 57% of pre-pandemic
levels I feel like maybe this number I
mean I'm comfortable accepting this
number as a valid measurements but then
on the other hand I think that maybe
some of it as unaccounted for because
okay so this is my experience with
dealing with like a restaurants during
the pandemic time everybody had a close
so then everybody had to update their
google their you know their Yelp pages
with their new hours or if they were
opened or closed and then you know they
can open again and it have been a long
time and so I feel like some restaurants
maybe didn't update everything perfectly
and there was one time I was trying to
make a reservation through Yelp or at
least link through their website or
something to make the reservation and
the read the the hours hadn't been
updated and I was unable to make that
reservation I had a call and I think so
maybe that might be happening where like
a lot of reservations are being made
through phone calls directly to the
restaurant versus through these apps
because I mean how many times did you
use Yelp during the pandemic I guess if
you were ordering takeout food often
maybe you
using it I used it zero times and I
usually use the up a lot I don't I don't
use it for making reservations or for
ordering food I use it just for
exploration to discover you know like
what's in my area what am I looking for
but I didn't use that app at all in the
past three months so you know now when I
have dined out which has only been you
know three times I think yeah three
times I'm tied down I knew exactly where
I was gonna dine and I knew exactly you
know I could just go pick up the phone
number and go I feel like Yelp is a
little bit different and it's it's user
ability so that could be why but at the
same time I'm I'm happy to accept this
57% of pre-pandemic levels I think it's
down and you know a lot of restaurants
are at lower capacity too so that could
be another reason for it the National
Restaurant Association estimated that 15
percent of restaurants could have closed
while Barclays as to me is more
optimistic predicting approximately 10%
Yelp is already acts what was that
number
53% permanently closed
that's crazy and that's the most so it
breaks it down shopping in retail is 35%
permanently clothes beauty and spas 24
percent permanently clothes and fitness
is at 26 percent permanently close oh I
see where this at 41 percent is the
average of all of those so 40.1% of
service industry businesses have already
done really close and again this is only
as of June 15th so you know there's
still a couple of weeks of unaccounted
data as well as what's going into the
future and you know I don't know I I
want to bring on an expert I hope next
week I could bring somebody on that I'd
love to bring on Jenny Wong I think that
she she'd be a good person has
conversation with about you know the
economic damage of not only closing one
time and you know having to be closed
from for some certain period of time but
being closed repeatedly after having to
restock your ingredients and your
fridges and your everything you know and
get higher your staff and get that all
on board again and then only to be
closed for a couple of days to have to
like re sanitize everything and get it
up and then if you want to be proactive
so some restaurants are being smart
they're they're evading this risk of
having to like close and reopen close
and reopen by being proactive but
there's a cost to do that as well so
that's a so someone sent me an article a
few weeks ago about a restaurant group
and how they're operating and then
pretty much requiring employees to take
tests every time tour they come in for
their shift every employee there's cost
to that and you know actually getting
good masks for your employees I was one
thing I want to go dine out at actually
a very nice restaurant
and on the strip and all the employees
are wearing masks I don't know if the
masks were good or not they definitely
weren't comfortable you can tell the
staff was not comfortable and they kept
playing with it and kept moving it
around you know I think that that that
kind of defeats the purpose of of the
mask if you're having to do that so you
know if you wanted to be really
proactive you'd get the best of the best
and you take care of the best that you
can of your employees but there's
classes to that as well
just like there's cost to reopening
Andry closing and reopening of your
closing so I think this fifty fifty
three percent permanent closure number
of restaurants is only the starts you
know I don't know what that number one
it up but we have definitely already
exceeded that forty percent because I
remember that was the number that I
remember seeing the restaurant
association well that was just of New
York
this is nationally so you know I think
the closure the percentage of closures
is even different you know in different
markets
this is something interesting going on
as far as search stats on Yelp the
research shows that restaurants catering
to group dining or making it come back
so right now if people are going out to
eat they want to go as a big group and
you know they're so it's saying fondue
searches are up 123 percent tapas bars
are up 98 percent hotpot up 48 percent
of buffets up 17 percent
I don't think you're gonna see a lot of
buffets open right now and then saying
that like the the hot pandemic cuisines
are starting to go down so pizza over
the past three months as a June 15th
Pizza has gone down 28 percent I think
people are tired of Pizza Chinese is
down 26 percent and fast-food is down 18
percent so I think people are if they
are gonna go out and die they want to do
something special they want to do
something different you know than just
the same old pizza and Chinese food it's
interesting
a number of states have reclosed
sanctioned to reclose their restaurants
and big markets including New Jersey New
York and California and it says yeah
restaurants at the strongest balance
sheets and best access to capital will
have the best chance to endure this
system be sustained closures and saying
that Taco Bell Domino's and Donald's are
all doing really well with massive
hirings fries but I don't know I'm a
little skeptical on that that fast food
is immune to these issues and immune to
the economic hardship because their
supply chain issues they're working on
even smaller margins they're working in
larger quantities and smaller margins
and so you know just a little switch and
your supply chain really affects the
rest of your balance sheet
you know while a smaller scale business
that may not have access to the same
resources and capital they they do have
a little bit more wiggle room as far as
like if there are changes to the supply
chain if like beef prices go up which
that has happened you know I would
imagine McDonald's they're powerful
don't get me wrong they're powerful and
they could negotiate something and they
can make something happen and I'm sure
that's what's happening like on the on
the corporate level there is something
going on and I think people are dining
less doing a lot more drive-through but
it's not enough I mean I know their
suppliers are even struggling right so
coca-cola let me let me see I haven't
talked about Coca Cola
in a long time but let's see what
they're up to
Yakko cool is not doing well they're
stopped has fallen 20% then they stopped
advertising on social media I saw that
article last week you know so like
there's like this boycott going on
particularly around Facebook but I think
all of the social media platforms are
kind of under the same umbrella that
these big brands don't want to advertise
anymore because they don't believe in
the politics but I mean secretly I'm
like they probably just trying to trying
to get things to work on their balance
sheets they did shut down while walla
juice Odwalla
i heard that yesterday this articles
from four days ago so yeah that's news
so their juice that's coca-cola owns
Odwalla juice
so let me read this Motley Fool why the
stock has dropped and you know I think
it's related to fast food and then also
related to like other events like
sporting events and other places because
that's actually where a lot of coca-cola
is distributed to and those events
aren't happening and then as well as
fast-food restaurants you know someone's
gonna go through the drive-through and
just pick up their meal like there's not
a whole lot of people just going in and
you know Vienna soda so that they can
sit and use the Wi-Fi at McDonald's like
what used to happen a lot and I think
the margins on soft drinks and fast food
restaurants are you know the strongest
for them so if they're not selling as
much and that's interesting it's
equivocal it dropped 19 percent and
Pepsi dropped 3 percent I wonder why
there's such a difference volume pump
plummeted 25 percent mid April so that
was the last thing that I had talked
about Pepsi also had a slump
oh so this articles not saying why it's
saying that we have to look out for the
report on July 13th Pepsi report in July
13th which I will
by July 13th which is next week I will
keep my eye out for this report and
we'll talk about it why their stocks
have dropped so yeah even the big guys
are not immune to these problems big
issues but I'm sure in those corporate
offices of golden state foods so golden
state foods is like the supplier of of
McDonald's you know they're probably
having a lot of meetings right now in
their corporate offices negotiating
contracts and trying to find a way to
maintain status quo because that's what
they need they need to maintain
as quote like a small mom-and-pop they
can innovate they can change they can
make something new they can figure out a
new path but you know McDonald's don't
really have that luxury
they have luxury of big profits and you
know lots of resources but all of that
is nothing without that status quo of
that commodity status and really you
know I've been talking about this for
years there needs to be changed there
the sustainability just won't last
forever there needs to be changed to the
commodity system and the commodity
pricing and that number I don't know
exactly I have heard for the tea
industry and so with that I you know
think that we could kind of translate
that into other agriculture industries
that there needs to be a seven time
increase of commodity pricing not even
just a 20% increase or a 30% increase
seven times that's six hundred percent
increase I forget so we get three
hundred fifty percent increase it's a
lot of increase and it's an increase
that the commodity corporate system
won't be able to manage won't be able to
sustain of course they're gonna try to
find their workarounds and and and
secure other ways but you know
ultimately into the future that is
what's going to be needed is an increase
of pricing an increase of value and that
the subways and Domino's and McDonald's
of the world will not be immune to now
small mom-and-pop that's you know just
working slowly and innovating will be
able to oh yeah I want to bring somebody
on really next week I'll cross my
fingers hopefully I can get someone like
Jenny I know Jenny's so busy most of my
friends that own restaurants are very
busy right now so
now I'm not trying to pull their
attention too much I know they have a
lot going on but I would like to hear
from them on the impact and and kind of
the fear of you know at covent response
you know is it worth it to be even be
open and this was a conversation that we
were having at the beginning of the
series a few months ago where a lot of
owners of businesses were saying that
they were actually losing money doing
takeout because you know there's certain
fixed costs and and and and and variable
costs to that even if you have a very
busy takeout business going on it's just
hard to keep it to keep profitable but
all these businesses we're doing it just
so that they could for the branding
opportunities to support the community
to get food out to people that you know
aren't prepared to cook each one of
their meals at home but is it worth it
you know to lose that and then now we're
in this new cycle where okay we got to
be open for dining it's legal to be open
for dining we got to be open but then
also one test positive we've got to
close down and I'd love to talk with
somebody about those actual numbers I'm
just imagining I'm an outsider not you
know not an actual stakeholder in that
system itself so what I'm saying here is
strictly commentary but believe that
it's kind of be pretty impactful so
hopefully next week I'll have somebody
on and we could talk about that because
I think that's super relevant right now
yeah so I'll start asking around if you
guys know of anybody or even if if you
are familiar with these these situations
and have some ideas about you know what
what it could look like maybe you can
come on you can come on right now
I've got my link right here but I think
I'm going to tune out soon so if you
come on why I feel
say hello goodbye I'm gonna go get back
to my work we've got to get my router up
so I got the modem working but now I got
to get the router up so that I can get
some Wi-Fi in this place cool I hope you
guys are eating well I hope you're
cooking some bomb food and barbeque
right so this past weekend was all about
barbecue I hope you had a good one my
family did ribs it was good well I'm
gonna go now tomorrow but I'll see you
tomorrow hopefully I'll go camping
tomorrow night and I'd like to go get
out get out of the heat you know I've
been living in my house I had a small
condo it's not a big house but a small
condo I've been living out of there for
the past week with no a/c and today it's
180 degrees so it's been been pretty hot
so I'd like to get out and get in the
mountains where it's a little bit cooler
but you know with that that heat comes
meditation comes challenge comes focus
comes endurance so I'm grateful for it I
think grateful for that experience
sweating in my house still cooking you
know whipping up whipping up some breads
and I - a chocolate chip cookies that's
been my my latest little snack well I'll
see you guys tomorrow
I appreciate you very much