This economy is now rebounding at a very strong pace after the COVID-19 slowdown. Consumers are bursting with money and spending it, and more and more people are fully immunized every day. This is particularly good news for small and medium-sized service and retail businesses that have been hit by the pandemic.
Some 15-20% of small businesses probably did not survive the pandemic. Many of them reappear, according to new data from Yelp.
The company reports that the second quarter saw the fastest pace of business reopening since last spring, led by restaurants and retailers, with auto renovations and repairs and an equally strong professional service line.
“Over 60,000 businesses have reopened, the highest reopening volume of the past year,” said Justin Norman, head of data science at Yelp.
In addition, a record number of new businesses have been opened.
And Yelp is finding something interesting about the places with the strongest commercial buzz: “[There is a] distinct correlation between vaccination rate and vaccination completion in an area, and number of reopenings and consumer interest, ”Norman said.
So that means more Yelp searches, posted photos, and reviews of stores and restaurants in places like Maine, Vermont, Connecticut, and New York.
Where there are lower vaccination rates, there is less consumer interest. “So places like Tennessee, Alabama, Mississippi, but also places in the west like Arizona, where vaccination rates are unfortunately low,” Norman said.
What is really strong across the country are new business openings.
“We know that 2020 saw a record number of new businesses, period. People who have been on leave from their jobs have taken the opportunity to start their own businesses. You see it in every business cycle after the recession, ”said Kathryn Petralia, co-founder of small business finance company Kabbage, now part of American Express.
New businesses are springing up in almost every industry, from restaurants and food carts to landscaping, construction, trade shows and gyms.
Many founders have one thing in common, said Ray Sandza of small business software company Homebase: DNA.
Which means, he said, they’re built to the lean, with features like mobile ordering, pickup, and delivery. Labor-saving apps can keep costs – and the need for new employees – to a minimum.