Yelp Data Reveals Nationwide Splurging on Restaurants and a Rising Interest in Fine Dining as New Restaurant Openings Increase

For more on the methodology for this report, click here.

Today, the U.S. restaurant industry and its consumer base are faced with a unique combination of economic conditions: continued staffing shortages, widespread layoffs, rising interest rates and persistent inflation driving up costs. As consumers and business owners confront these everyday challenges, Yelp data uncovers new trends in consumer demand and dining habits, especially in major metropolitans like New York, Los Angeles and San Francisco.

​​The restaurant industry shows strong signs of growth with business openings up nationally, especially for pop-up concepts, which entice consumers with their fleeting nature and experimental menus. Yelp data confirms rising demand among diners, with consumer interest in restaurants and nightlife businesses increasing nationally. In contrast, other discretionary spending categories have seen a sharp decrease in consumer interest, like shopping and beauty services for example. Dining habits are also shifting with consumers demonstrating an eagerness for special nights out, fine dining experiences, off-peak dining hours and last-minute reservations.

Restaurant Openings are up Nationally, Especially for Pop-up Concepts and Full-service Experiences

Amid economic uncertainty, the restaurant industry has experienced a strong comeback with new business openings up 10% nationally between April 2022 and March 2023 compared to April 2021 and March 2022. Notably, new pop-up restaurants, which began as a cost-saving solution during the pandemic, are on the rise (up 105%), growing into an industry trend that continues to see quick-service pop-ups share a space with breweries, bars and even restaurants. Many full-service restaurants also saw a spike in new business openings in the U.S., including ramen (up 45%), breakfast and brunch (up 20%), sushi (up 13%) and steakhouses (up 9%).

Nationwide Consumer Interest in Restaurants, Nightlife and Entertainment Businesses is on the Rise, While Shopping and Beauty See Decline

With new openings for restaurants on the rise, Yelp data confirms increasing consumer demand for these types of businesses. Yelp assessed national and local changes in discretionary spending categories, analyzing how consumer interest has changed during the six-month period between October 2022 through March 2023, a period marked by ongoing layoffs across industries, compared to the same time period the year prior.

While discretionary categories such as beauty services and shopping (both down 6%), event planning and services (down 3%) and hotels and travel (down 2%) saw sharp decreases in nationwide consumer interest year over year, Yelp data found an increased interest in categories that provide a local experience, including arts and entertainment (up 6%), bars and nightlife (up 5%) and restaurants (up 3%).

Among arts and entertainment businesses, paint and sip businesses (up 17%) saw the most significant growth in interest. Nightlife and restaurant businesses such as speakeasies (up 18%), comedy clubs (up 17%), New Mexican restaurants (up 29%), African restaurants (up 21%) and pop-up restaurants (up 18%) experienced some of the largest increases in consumer interest year over year. Within beauty businesses, Yelp data found decreased consumer interest in permanent makeup (down 8%), eyelash services (down 7%) and makeup artists (down 5%). While shopping businesses such as computer stores (down 27%), furniture stores (down 11%), and nurseries and gardening shops (down 9%) experienced the largest declines in consumer interest.

These trends remained true locally, even in some of the cities most impacted by layoffs, with California metros like San Francisco and San Jose seeing drops greater than the national trend in categories like beauty services (down 7% and 6%, respectively) and shopping (down 9% and 10%). Meanwhile, consumer interest in nightlife businesses surpassed the national average (up 5%) in San Jose (up 7%); New York (up 6%) and Seattle (up 6%). Mirroring the national trend, diners in these cities showed a slight increase in consumer interest in restaurants, up approximately 3% across San Francisco, San Jose, Seattle, Los Angeles and New York.

Consumer Interest in Fine Dining Surpasses Pre-Pandemic Levels as Interest in Affordable Restaurants Dip

Yelp also analyzed consumer interest in restaurants across different price points, ranging from $ to $$$$ between April 2022 and March 2023 compared to the same period the year prior. The data suggests that consumers are forgoing affordable options for higher-end dining experiences. In fact, consumer interest for low price point restaurants ($) decreased by 4% nationally, while states such as Nevada (down 12%), Utah (down 11%) and Oregon (down 10%) saw the largest decreases. Food businesses (including businesses such as bakeries, coffee shops, and butchers) also saw a similar pattern with consumer interest in affordable options decreasing nearly 4%.

Contrary to some reports, Yelp data reveals that fine dining is not dead. When compared to pre-pandemic levels (April 2019 through March 2020), consumer interest decreased nearly 16% for traditionally affordable restaurants ($). Notably, interest in higher priced restaurants ($$$ and $$$$) rose nearly 10% and 17%, respectively, compared to pre-pandemic levels. We continue to see this trend year over year, with consumer interest up nearly 2% for both pricing designations ($$$ and $$$$).

Diners Shift to Earlier Meals and Avoid Planning Ahead

As consumer interest in restaurants increases nationally, some dining habits are changing with diners signaling an interest in earlier reservation times. In 2023, 10% of all diners were seated between 2-5 p.m., which doubled from 5% compared to the same time period in 2019 (pre-pandemic). Notably, interest in less busy times for restaurants jumped, with 4 p.m. reservations more than doubling from 2% in 2019 to 5% in 2023. However, evenings (5 p.m.-12 a.m.) still remain the most popular time for dining reservations on weekends, accounting for nearly 60% of daily reservations and 6 p.m. remaining the prime reservation time, accounting for 20% of daily reservations.

Diners’ preferred days have remained consistent with weekends, more specifically Saturdays, continuing to lead as the most popular day of the week for eating out, accounting for 30% of weekly reservations,​​ followed by Sunday and Friday (23% and 19% of weekly reservations, respectively).

In our Q2 2022 Yelp Economic Average Report, Yelp found that consumers were booking reservations further in advance than ever before. Yelp data now shows a new shift of many diners booking last-minute reservations, with a majority of reservations (59%) being made on the same day or the day before the reservation.

These findings remain consistent even across major dining-out holidays such as Valentine’s Day and Mother’s Day. In 2022, more than one in four (27%) diners using Yelp Reservations waited until the last minute, booking the same weekend.

As consumer dining habits continue to evolve, the restaurant and nightlife industries change with them, creating new ways to earn consumers’ interest with memorable experiences, pop-ups and fine dining menus. Amid current economic uncertainties, Yelp will continue to track how consumers invest their time and dollars, and how business owners adapt over time.

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