SAN FRANCISCO--(BUSINESS WIRE)--Yelp Inc. (NYSE:YELP), the company that connects people with great local businesses, today released third quarter 2022 data for the Yelp Economic Average (YEA) report, a benchmark of local economic strength in the U.S. The Q3 2022 YEA report reveals that inflation experiences have intensified for consumers in every state in the U.S. year over year, with reviews mentioning inflation up by 22% compared to Q3 2021.
Yelp found that food businesses are seeing one of the largest increases of inflationary experiences compared to Q3 2021, followed by restaurants, then businesses in the categories of beauty and spas, arts and entertainment, nightlife and bars, and hotels and travel. In response, consumer searches for budget-friendly dining and grocery options are higher than Q3 2021.
"While U.S. inflation doesn't appear to be slowing down, Yelp's data shows consumers are increasingly looking for more affordable options to counter this uncertainty," said Pria Mudan, data science leader at Yelp. "We continue to see increasing mentions of inflation for food businesses and restaurants, aligning with the recent Consumer Price Index report that found prices for food away from home was up 8.5% from 2022. It's clear consumers are mindful of their wallets with Yelp searches related to affordable groceries and fast food concepts noticeably up from last year."
Consumers increasingly feel the impact of inflation, especially in the Southwest this past quarter
As the annual inflation rate remains above market forecasts, only slightly decreasing to 8.2% in September 2022, consumers continue to show increased signs of inflation fatigue. Every U.S. state, as well as Washington D.C., saw an increase in inflation mentions in Yelp reviews compared to Q3 2021.
Regionally, Yelp data shows that the Southwest is experiencing the highest quarter-over-quarter growth of inflation mentions – up 7% compared to Q2 2022. Meanwhile, the Midwest is experiencing the highest growth of inflation mentions year over year – up 26%.
Food businesses saw one of the largest increases of inflationary experiences in the past year, followed by restaurants, beauty, arts and entertainment, and nightlife
Consumers report experiencing inflation the most at food businesses and restaurants, with inflation mentions in reviews up 31% and 28%, respectively, year over year. Of all Yelp restaurant categories that saw an increase in inflationary experiences, a quarter of them serve Asian cuisine, with a 24% average increase of inflation mentions from Q3 2021. Additionally, grocery stores and markets make up four of the top five food businesses with an increase in inflationary mentions in reviews compared to Q3 2021. Food businesses primarily selling desserts also saw a 29% average increase in inflation mentions compared to Q3 2021.
When compared to Q3 2021, the following categories each saw an increase of inflation mentions in reviews on Yelp:
- Beauty services and spas up by 21%
- Arts and entertainment up by 19%
- Nightlife up by 17%
- Hotel and travel businesses up by 11%, particularly related to lodging businesses
- On average, retail and event categories related to weddings up by 29%
As inflation remains high, users are increasingly searching for budget-friendly dining and grocery options
In Q3 2022, searches for budget dining and grocery options are up by 11% from the previous quarter and 9% compared to Q3 2021. Within these searches, Yelp data shows that searches for terms related to affordable groceries were used 67% more often compared with Q2 2022 and 126% more compared to Q3 2021. Additionally, searches related to fast food and fast casual dining are up by 10% compared with Q2 2022 and 8% more compared to Q3 2021.
Not all states are turning to these budget options equally. Yelp data shows that the states with the highest increase in searches related to affordable dining and groceries in the past quarter were in Washington D.C. (up 27%), Louisiana (up 26%), New York (up 25%), West Virginia (up 24%), Pennsylvania (up 20%) and Mississippi (up 20%).
Read the full Q3 2022 YEA report, as well as previous YEA reports, at yelpeconomicaverage.com. Assets and images from the 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
Review Text Mentions of Inflation
We analyzed review text from 2020 through Q3 2022 to observe how Yelp consumers are referencing inflation in reviews. These inflation references can include phrases mentioning inflation itself or higher or rising prices at businesses. The volume of review text phrases are normalized to the mention frequency per every million words, and is calculated for each Yelp category and on a national, regional, and state basis. A minimum threshold of review mentions was implemented to uncover the most noteworthy inflation experiences.
Consumer searches for budget dining and groceries
Budget dining and groceries searches refer to queries such as “fast casual,” “fast food,” “cheap eats,” and “cheap grocery store,” among others. When analyzing the search behavior, we measured the appearance of budget dining and groceries related phrases in every million Yelp searches. We compared the search behavior period over period to inform how consumer dining preferences had changed across locations.
About Yelp Inc.
Yelp Inc. (www.yelp.com) connects people with great local businesses. With unmatched local business information, photos and review content, Yelp provides a one-stop local platform for consumers to discover, connect and transact with local businesses of all sizes by making it easy to request a quote, join a waitlist, and make a reservation, appointment or purchase. Yelp was founded in San Francisco in July 2004.