Close Ad

The Spoon

Daily news and analysis about the food tech revolution

Yelp

Yelp Adds New Alert to Flag Businesses Accused of Racist Behavior

Yelp unveiled in a blog post this week a new consumer alert to warn users about restaurants, bars, and other businesses that may be associated with racist behaviors. The Business Accused of Racist Behavior Alert can be applied when a business gets attention for reports of racist language symbols, and other conduct.

From Yelp’s blog post:

“The new Business Accused of Racist Behavior Alert is an extension of our Public Attention Alert that we introduced in response to a rise in social activism surrounding the Black Lives Matter movement. If someone associated with a business is accused of, or the target of, racist behavior, we will place a Public Attention Alert on the business page to warn consumers that the business may be receiving an influx of reviews as a result of increased attention.”

For business accused of “overtly racist actions,” where the incident can be linked to a news article, Yelp said it would escalate its warning to the Business Accused of Racist Behavior Alert.  

The company noted that reviews mentioning Black-owned businesses were up 617 percent this summer compared to last. However, “while searches for Black-owned businesses surged on Yelp, so did the volume of reviews warning users of racist behavior at businesses.”

The new alert comes in the wake of the killings of George Floyd, Breonna Taylor, and many other Black people, and at a time when protests against racism have ramped up and advocates are calling for change around racism and police brutality. Yelp said the Business Accused of Racist Behavior Alert is in response to “a rise in social activism” around the Black Lives Matter movement.

Yelp: Permanent and Temporary Restaurant Closures Are Increasing

Roughly 61 percent of businesses listed as “closed” on Yelp have shuttered permanently, according to the platform’s latest Local Economic Impact report.

A total of 32,109 restaurants that were marked as open on the Yelp platform on March 1 are now closed, the new report details. Those numbers make the restaurant industry the most impacted by the pandemic of any business type on Yelp.

Those numbers, of course, only account for the restaurants listed on Yelp’s platform. The National Restaurant Association, which represents the entire restaurant industry, released its own findings this week that said 100,000 restaurants, or nearly one in six, are closed either permanently or for the long term. But whether you go by Yelp’s numbers or the Association’s more widespread findings, the conclusion is the same: the uptick in restaurant closures continues to rise.

As far as Yelp’s new data is concerned, restaurant closure rates vary across the country. As today’s report notes, “Bigger states and metros with higher rents and more stringent local operations for small businesses throughout the last six months have felt a greater toll.” Geographically speaking, California, Texas, Florida, and New York had the highest number of closures of states, while Los Angeles, NYC, San Francisco, Chicago, and Dallas topped the list for cities.

Types of restaurants with the most closures include breakfast/brunch spots, burger joints, sandwich shops, dessert places and Mexican restaurants.

Yelp’s report wasn’t all gloomy news, though. It also noted that some restaurants have been able to maintain low closure rates. Not surprisingly, those are the restaurants focusing on delivery and takeout, offering food that travels well. While a small silver lining, that point suggests the work restaurants have been doing for the last six months to shift their strategies towards more to-go-friendly formats is not in vain.

Yelp’s new report, along with the Association’s figures, both come just days after the the CDC released findings that suggest those who eat in restaurant dining rooms are twice as likely to be at risk for COVID-19.

Black Box Intelligence: Full-Service Restaurant Sales Slumping, Off-Premises Still on the Rise

As the number of COVID-19 cases spikes in multiple states, full-service restaurant recovery has slowed, according to new data from Black Box Intelligence in a story by Nation’s Restaurant News.

Black Box, a Dallas, TX-based restaurant analytics firm, said as COVID-19 cases rise and new restrictions set in place (see California), dine-in sales at restaurants have decreased. 

Part of the reason for that is the number of restaurants actually open for dine-in service. “After a steady climb since the end of April, the percentage of restaurants existing in the pre-COVID era that are now open for dine-in has plateaued around 87% for the last three weeks,”said Black Box.

This shouldn’t surprise too much. In the last few weeks, major chains like McDonald’s have halted their reopening plans for dining rooms and some states have either reduced capacity or ordered in-house service to stop altogether. 

Also not surprising: off-premises sales are increasing for quick-service and fast-casual restaurants. Black Box said that while off-premises sales had been slowing as restaurants reopened, “that trend has now been reversed in the last three weeks.”

This new data comes on the same week Yelp released its latest Economic Average Report, which found that 60 percent of businesses that have closed are now shuttered permanently. 

None of that makes for a very positive outlook for many independent restaurants used to relying on dine-in service that don’t have the dollars of a major chain to invest in off-premises. Starbucks or Chipotle, for example, may have the bucks to pivot their models to new, to-go-friendly formats that ensure sales. The future is much less certain for your favorite mom-and-pop joint, though.

Whether sales at full-service restaurants gain momentum again depends a lot on the trajectory of the pandemic. Judging from the latest numbers around the latter, dining room sales will likely stay down for some time to come.

Yelp: 60 Percent of Closed Restaurants Have Shuttered Permanently

Today, Yelp released its Q2 2020 Economic Average Report, which tracks business closures (temporary and permanent) to analyze how industries like retail foodservice are being impacted by the ongoing pandemic. Sadly, the latest findings around the restaurant industry are nothing to celebrate.

According to the report, which The Spoon was sent a copy of, the restaurant industry surpassed retail in having the highest total business closures. Of those closed restaurants, 60 percent are shuttered permanently.

From the report:

“As of July 10, there have been 26,160 total restaurant closures, an increase of 2,179 since June 15. Of the all closed restaurants in July, 15,770 have permanently closed (60%), accounting for 2,956 more permanent closures, a 23% increase since June 15.”

The report also notes that “Overall, permanent closures have steadily increased since the peak of the pandemic with minor spikes in March, followed by May and June.”

At the same time, however, consumer interest in restaurants, bars, wineries, and other food-related businesses is returning to pre-pandemic levels, according to the report. That makes sense, as we’ve all been cooped up at home for months now and more people are eager to resume their normal activities outside the house.

Those “normal” activities, though, seem like an increasingly bad idea, as Yelp noted a statistically significant correlation between an increase of consumer interest in restaurants, bars and nightlife, and gyms in May and an increase in COVID-19 cases in June.” Once the data for July comes in, I doubt much changes. 

In the restaurant biz, that could mean more permanent closures, and it’s not hard to see why. Restaurants have historically operated off extremely thin margins. And even before the pandemic hit, the move to off-premises orders was steadily gaining momentum with delivery, drive-thru, and other to-go-centric formats. Restaurants that have historically never had to focus too heavily on the off-premises side of things now find themselves in a position where they must offer these formats or risk going out of business. Even when they do, the logistics, not to mention the cost, of doing off-premises can be so burdensome it can in some cases cause more harm than good.

How many states have to follow California’s lead and re-close parts of their economies will further impact the number of permanent restaurant closures over the next few months, and probably for the rest of the year. The hope is that by the time Yelp releases its Economic Average Report for Q3, the numbers for restaurants won’t be so dire. At this point, though, that hope is far from certain.

Yelp Lays Off 1,000 Staff Members, Furloughs More, and Cuts Hours

This morning, Yelp announced it is reducing the size of its workforce due to the impact of COVID-19 on the company’s business. In a letter sent to employees, co-founder and CEO Jeremy Stoppelman wrote that the company is letting 1,000 people go and will furlough roughly 1,100 more. It will also be cutting back hours for some employees.

“The physical distancing measures and shelter-in-place orders, while critical to flatten the curve, have dealt a devastating blow to the local businesses that are core to our mission,” he wrote.

Social distancing measures have closed stores, gyms, hair salons, and, of course, restaurants. So it’s only mildly surprising that Yelp, which is best known for its user-generated restaurant reviews, is feeling the impacts of coronavirus and the nationwide dining room shutdowns. In his letter, Stoppelman called restaurants Yelp’s “most popular category” and noted that interest in them on the site has dropped 64 percent since March 10. “All told, the millions of local businesses hit hardest by the effects of COVID-19 face the prospect of closing and laying off their employees, without knowing when, or if, they’ll be able to reopen.” 

Employees that receive layoffs will get severance pay and up to three months of reimbursement for health insurance coverage. Those on furlough will get unpaid leave but receive two weeks of additional pay and also keep their benefits.

Yelp will also implement 20–30 percent pay cuts for all executives, reduced server costs, “deprioritized” projects and redo the budget based on ensuring company survival (instead of growth). Stoppelman himself will not be taking a salary. 

He ended his letter saying that coming months will require the company to “stay nimble and adapt” — an idea more and more businesses across the restaurant industry are being forced to do. That’s true not only of restaurants (both large chains and mom-and-pop businesses) but also companies that provide tech solutions to restaurants. For example, earlier this week, Toast, a company previously valued at $5 billion, announced it was cutting half its staff. 

I’d like to put a silver lining on all this, but the unfortunate truth is that layoffs, furloughs, and other drastic moves to stay nimble and adapt are on the way, and the effects of them will persist long after the pandemic is under control. 

Week in Restaurants: Domino’s Might Win Its Fight Against Third-party Delivery

Greetings from the far reaches of Newark Liberty International Airport. I’m off to Madrid to check out the the Hospitality 4.0 Congress for a few days. You should be finalizing your travel plans as well — to NYC, specifically, where you can join us next week for The Spoon’s daylong Customize event. We’ll be discussing food personalization and what that trend means for your diet, your kitchen, and your restaurant orders. Don’t sleep on this one. Grab one of the few remaining tickets here.

In the meantime, here are a few more restaurant-related stories from around the web this week.

Domino’s Stance Against Third-Party Delivery Is Paying Off

Who can possibly stand up to third-party delivery’s mission to dominate the restaurant industry? Domino’s apparently.

The pizza chain is at this point as famous for its in-house delivery policy as it is for its pies, and on its Q4 2019 earnings call this week, the Ann Arbor-based company announced same-store sales growth of $3.4 percent, while its stock jumped 25 percent. In other words, its anti-third-party-delivery stance isn’t killing its business, at least not yet. On the call, Domino’s CEO Ritch Allison did note that the company is still seeing a lot of pressure from third-party services. “As we look back on the quarter, it does appear to us that while we see continued headwinds in delivery that are difficult to forecast, aggregator pressure appeared to level off on our delivery orders in Q4, while carryout traffic was outstanding during the quarter, as our strategy to grow that business continues to pay off.“

Waitr to Lay Off 2,300 Drivers

Troubled food delivery service Waitr will lay off 2,300 delivery drivers in its home state of Louisiana, according to a notice filed with the state’s labor department. This announcement comes just a couple weeks after the service announced it would reclassify drivers as contract workers and pay them per delivery rather than per hour, as the old model dictated. The layoffs are effective April 6. A Waitr spokesperson said impacted drivers will be able to keep working as contracted drivers.

The Cheesecake Factory Is Finally Taking Yelp Reservations

Ever visit a Cheesecake Factory on a Friday at 7 p.m.? You’re lucky if you wait only an hour to get a table. Until now, that is. On a call with investors this week, the company announced it has partnered with Yelp to start offering limited seating reservations, meaning a certain number of tables will be set aside for reservations throughout the week.

This isn’t the most earth-shattering news out there today, but it does point to the work restaurants are currently doing to make the front-of-house experience more efficient and hopefully increase dine-in visits from customers. “One of the biggest hurdles for our guests can be our long wait times,” he said. “So we’re hoping this additional convenience will encourage guests who are more pressed for time to dine with us,” president David Gordon said on the call.

Week in Restaurants: Regulators Are Coming for Delivery, Denny’s and Yelp Team Up

Happy Valentine’s Day, food techies. If you haven’t run away to Las Vegas yet to get hitched at a Denny’s, there’s still time.

But speaking of Denny’s, the chain announced a new pilot with Yelp this week. Elsewhere in the restaurant world, Subway is now using Olo’s technology to handle delivery orders, and if you want more intel on the demise of Zume’s vision for mobile pizza kitchens, read on.

Yelp Pilots a New Feature to Measure In-Store Visits

Yelp this week launched Yelp Store Visits, a metric meant to help restaurants and other stores measure how online activity on Yelp drives customer visits to physical locations. The opt-in tool is available to businesses with multiple locations and meant to help them increase foot traffic to their physical stores. The company also introduced Showcase Ads, which lets multi-unit brands highlight special deals and promotions via video ads to Yelp users. Denny’s piloted both tools in 2019 and saw positive results. 

Subway and Olo Partner for Integrated Delivery

Subway announced a partnership with Olo to integrate digital orders directly into its POS system, making it easier for the sandwich chain to process and fulfill off-premises orders coming from multiple sales channels. With Olo’s technology, orders coming from third-party services like Grubhub or Postmates go directly into the restaurant’s main POS system, removing the need for an employee to manually input the information into the ticket stream and lowering the risk of human error when it comes to order accuracy.

Regulation Is Coming for Third-party Delivery

It’s no secret that people are getting fed up with third-party delivery services’ Wild West tactics. Now regulators are stepping in, proposing legislation meant to check some of the practices companies like DoorDash and Grubhub employ that often don’t seem to benefit anyone but themselves. This week alone, California and Rhode Island introduced legislation, and Nation’s Restaurant News rounded up a few more states that are also taking third-party delivery to task, which could change the way the model operates in future. Read the full list here.

Inside the Fall of Zume’s Robot Pizza Delivery

Zume, a startup famous for its pizza-making robots, made headlines in January when it announced it was laying off 360 staff members and facing challenges securing more funding from investor Softbank. What happened to the once-promising startup? An article from Bloomberg Businessweek goes into the details of the startup’s evolution and how it landed in its current predicament.

Week in Restaurants: Delivery Gears Up for Super Bowl Sunday

In today’s delivery-crazed culture in which we live, Super Bowl Sunday has become as much about the food we’re ordering as it is about football or hotly anticipated TV ads. Makes sense, then, that QSRs, fast-casual joints, third-party delivery services, and many more are dabbling in delivery initiatives this coming Sunday. Check a couple of them below, as well as more restaurant-centric news from around the web this week.

Chipotle is running a TikTok campaign for Super Bowl Sunday.

In a clear bid to win over Generation Z, Chipotle has launched a campaign on TikTok called “TikTok Timeout.” For every commercial break after a timeout during the big game, some of the app’s most popular content creators will share their own Chipotle delivery ads set to Justin Bieber’s song “Yummy.” The campaign is searchable through the hashtag #TikTokTimeout.

Little Caesars spotlights delivery with DoorDash.

Known historically for its pickup service, Little Caesars finally joined the delivery craze not long ago when it announced a partnership with DoorDash to ship pizzas directly to customers’ doorsteps. The pizza chain is spotlighting that move with its first-ever Super Bowl ad, which could cost over $5 million. Clearly the chain is ready to invest aggressively in delivery. 

Postmates will have customers sign a waiver for wings.

Delivery service Postmates is running a couple Super Bowl-centric initiatives this week, according to an email sent to The Spoon. From January 30 to February 1, Postmates users can enter to win a wings pack themed around the web series “Hot Ones.” The goods, which include wings as well as “Hot Ones”-branded sauces, will be delivered to the winner on February 2 just before the game starts. The wings are apparently so hot users must sign a waiver upon delivery. 

In a separate campaign, Postmates users can also enter to win a year’s worth of pizza or wings. More details on the campaigns are here.

Yelp launches health score pop-up alerts for restaurants.

Yelp released a new feature this week in Chicago and Los Angeles that alerts users via pop-ups when a restaurant has health code violations. According to the Chicago Tribune, when a user scrolls through a restaurant’s review page, they will see a pop-up message alerting them if the establishment has a bad health score. Yelp already lists restaurants’ health scores on their pages; the added pop-up feature is a way to quickly call attention to businesses with the worst violations. The Chicago and Los Angeles release of the feature Yelp did in its hometown of San Francisco in 2015.


Restaurant Software Company Popmenu Raises $4.5M in Series A Funding

Atlanta, GA-based Popmenu, which makes guest engagement software for restaurants, just announced a $4.5 million Series A round led by Base10 Partners’ Rexhi Dollaku and with participation from Felicis Ventures’ Niki Pezeshki. To date, Popmenu has raised a total of $6 million.

Popmenu positions its SaaS platform specifically as a way for restaurants to regain more control over their branding online. That’s something food businesses in particular struggle with in an age when Yelp, Google, and third-party delivery sites double as discovery engines but are also known for posting mediocre photos, biased reviews, and other material that doesn’t always accurately represent a restaurant.

Popmenu is trying to change that by moving the digital conversation about any given restaurant back to the restaurant’s own website. Its cloud-based software provides a dynamic menu experience for customers, who can also upload photos, leave reviews, and interact with one another without leaving the restaurant’s own branded area online. They can also receive special offers and promotions. On the back end, restaurants get the advantage of real-time menu management and data analytics tools that can tell them more about customers and their preferences.

It remains to be seen if those features will be enough to entice restaurants to sign up with the service, and for customers to actually leave Yelp, Google, Grubhub, and other third-party sites, whose streamlined user experiences make them easy to use and therefore convenient.

“Restaurateurs are passionate and personally invested in their business, and to be able to help them feel a greater sense of control over their digital presence means everything to us,” Tony Roy, President and Co-Founder of Popmenu, said in a statement.

Restaurant review tools aside, he has a point. As off-premises restaurant orders proliferate and more businesses try their hand at the virtual restaurant concept, online branding is becoming as important as the food itself. Already, some chains are taking back control on parts of the delivery process, and discovery and recommendations are definitely a part of that.

According to the press release, the new funding will go towards further R&D for Popmenu’s platform. 

Yelp’s New Features Highlight the Company’s Struggle to Stay Relevant in the Restaurant Space

This morning, Yelp unveiled new features: Yelp Connect, a social feature for restaurants, and updates to Yelp Waitlist.

According to a press release sent to The Spoon, Yelp Connect is a subscription service that lets businesses share information — drink specials, menu updates, upcoming events — with followers in much the same manner they would on any other social network. The feature, priced at $199/month for restaurants, aims to give businesses more control over their own Yelp page by letting them share information they feel will be most relevant to current and potential customers.

Also today, Yelp Waitlist, which lets users “get in line” from their phones and has been around for some time, launched two new features. Predictive Wait Time gathers restaurant data to show users, via a handy bar chart, how long the wait time is at any given hour at a restaurant. Waitlist’s other new feature, Notify Me, lets people schedule a reminder on Yelp to join a waitlist. A user specifies when they want to dine and how many people will be in their party. Using data based on the current wait time at the restaurant, Yelp will then notify the user when it’s time to join the in order to get a table at the desired time. Waitlist starts at $249/month for restaurants.

Both of these are great news if you’re a diehard Yelp user who wants a single app to the find the latest updates on a favorite restaurant and skip waiting in line to eat there.

If you’re not, however, these updates don’t seem particularly competitive at first glance, nor are they particularly unique. Waitbusters, for example, has long had a platform that lets guests “get in line” without, you know, getting in line, and also offers some data analytics for restaurants. At $129/month, it’s a good deal cheaper than Yelp’s offering.

Then there’s Google, with whom Yelp has had a longtime rivalry. Via Maps, restaurant-goers can follow favorite eating establishments, read reviews, join a waitlist, and, yep, view busy times via a bar graph. Meanwhile, Google has also added features in 2019 like menu recognition via Google Lens and a Maps feature that lets you parse through photos and reviews of popular dishes.

Yelp itself has been plagued by controversies, plunging stocks, and increased competition from social media sites like Facebook and Instagram over the years. Unfortunately, a few more incremental updates won’t give the company an edge in this fight. Instead, they feel a bit like a case of too little, too late.

Yelp Has a New Initiative to Help Reduce Plastic Waste in Restaurants

Yelp gave a nod to Earth Day this morning by launching a new initiative that rates restaurants’ eco-friendliness factor.

With Yelp’s Green Practices initiative, Yelp reviewers can answer questions around a restaurant’s takeout packaging — whether the business offers compostable containers, uses plastic bags, or has discounts for things like bringing your own reusable beverage mug. The interface to do so looks and functions much like any other Yelp rating tool:

According to a blog post by Yelp product manager Jason Purdy, Yelp will use the information from the surveys “to better understand restaurant behaviors across the country and inform how we surface information about restaurant sustainability for consumers.”

Single-use plastics are just the start. Purdy noted in the same blog post that Yelp is working with a number of different partners to gather and present information about multiple sustainability issues, including the State of California Air Resource Board, the City of Los Angeles Green Business Program, and Clean Water Action’s ReThink Disposable program.

Purdy’s post also said Yelp will eliminate single-use plastic cups, plates, and utensils from all U.S. offices by the end of 2019.

Reducing packaging waste is a huge topic in the restaurant industry right now, with an ever-growing number of businesses announcing various moves to tackle their reliance on single-use plastic. Starbucks announced last year it would eliminate single-use plastic straws from its 28,000 locations by 2020. McDonald’s is trying to find a more sustainable hot/cold cup. KFC has said it will convert to renewable plastic sources by 2025.

Beyond businesses, the EU vowed it will ban single-use plastics by 2021. Stateside, Seattle became the first major U.S. city to ban single-use plastics, in 2018; California and Washington, D.C. NYC currently has legislation in place to enact a similar ban.

To be honest, there are probably enough initiatives in place at this point to fill a 1,500-word post. The question is whether they’ll have enough of an effect on consumer behavior to change our relationship with single-use plastics in restaurants. To be sure, programs like Yelp’s will get people thinking more about how much waste gets created just by getting a to-go order. Now it’s a matter of using these types of initiatives to get consumers beyond thinking and into action.

Yelp Is Now Listing Restaurant Hygiene Scores, and Not Everyone’s Thrilled

Today, Yelp announced the national rollout of its LIVES program, which posts restaurant hygiene scores alongside other basic info about eating establishments (via The New York Post).

Not everyone’s happy about this. Especially the restaurants.

Yelp started the LIVES program in 2013 in the company’s hometown of San Francisco. To expand on a national level, Yelp teamed up with HDScores, who reportedly has data on almost 1.2 million U.S. restaurants.

This could be a big win for consumers. After all, nobody wants a side of salmonella poisoning with their huevos rancheros. And while some states require by law that restaurants post their health grade in the window, much of the granular information is hard to find. As Yelp writes on its official blog:

“Unfortunately, this information is often buried on clunky ‘dot gov’ websites beyond the easy reach of consumers. Or equally inconvenient, it’s accessible in the offline world, displayed somewhere in the physical business, and not always obvious to the diner.”

Yelp wants to change that by pulling information like inspection type, number and type of violations, and score over time from government databases and making it easy to read online:

 

On the other hand, it could just be another way for Yelp to needlessly ruin the reputations of restaurants. The San Francisco rollout of LIVES was met with some controversy, since SF’s flawed health-inspection system is well-documented and scores could be outdated and not reflect the actual state of a restaurant. But the casual diner looking for a meal isn’t likely to factor that in when they see “Customer Alert: Poor Food Safety Score!” next to a listing. Yelp and independent restaurants have never been great bedfellows anyway. Complaints against the site run the gamut, from the potentially harmful filtering algorithm to accusations of extortion.

But Yelp’s not going anywhere anytime soon, so if you’re an independent restaurant owner, it’s advisable to arm yourself with tools that can make a business more ready for a visit from the health department. Last year, the FDA released software to help businesses better comply with regulations. There’s also a growing number of apps, of varying quality, that cover everything from food temperature and handling to training staff on best practices. These can help restaurants minimize the risk of getting a poor health-inspection score.

Underscore that word “minimize,” though. Health departments around the country are famous for being fickle and sometimes downright unreasonable. Plus, as others interviewed by the Post worry that Yelp, being a business and not a health department, won’t understand the nuances of some laws and violations. There’s also an added complication that restaurant-inspection laws and scoring varies from state to state. NYC, for example, uses a letter grade system, while Washington DC doesn’t follow a score system and instead files reports. How Yelp will standardize this information and make sense of it for the average person looking for dinner remains to be seen.

As of today, Yelp LIVES is focused on restaurants in California, Texas, Illinois, and Washington, DC. It will roll out updates to other states over the coming months. As to whether or not the program will meet with success in these areas, consider the grade still pending.