New business openings reached their highest peak in the past 12 months, another positive sign the U.S. economy is storming back, according to Yelp’s latest Economic Average report. 

Nearly 146,500 businesses opened in Q1, a decrease of just 2 percent, year-over-year, and an increase of 4 percent compared to Q1 2019. 

The 18,217 restaurant and food openings were 5 percent better than Q1 2020 and only 4 percent below Q1 2019. In April 2020, new restaurant and food openings fell to a pandemic-low of 3,160, but they soon rebounded with a 29 percent average monthly increase from May to July. In Q3 2020, Yelp observed restaurant and food businesses open at pre-pandemic levels because of innovation around outdoor seating and prioritizing nontraditional services like farmers markets and food trucks. New restaurant openings in Q3 were only down 10 percent compared to 2019. The fourth quarter saw the same trend—18,207 restaurant businesses opened, only a 4 percent decrease from the year-ago period. 

“The start of the new year brought many positive changes to local economies – a downward trend of nationwide COVID-19 cases, more than 200 million vaccinations administered and many local businesses reopening with larger capacity and indoor operations,” Yelp said in its report. 

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Yelp said food businesses that lean toward takeout, outdoor dining, and other COVID safety measures experienced the most growth in the recent period. When comparing Q1 to Q4 2020, food delivery services saw the highest jump by far at 22.1 percent. That category was followed by seafood markets (10.4 percent), macarons (10.3 percent), desserts (9.6 percent), chicken shops (8.5 percent), and food trucks (8.4 percent). 

The pandemic is still affecting some dining experiences, particularly those designed for a group occasion, Yelp noted. The restaurant and food categories that experienced the least growth compared to Q4 2020 were hot pot restaurants (–22 percent), buffets (–19.8 percent), tapas/small plates (-12.7 percent), ramen (–12.4 percent), and diners (–11.3 percent). 

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Almost every state saw an increase in business openings in Q1 as compared to Q4 2020, with the best growth seen in Mississippi (39 percent, 979 openings), Alabama (35 percent, 1,921 openings), Maine (32 percent, 450 openings), South Carolina (31 percent, 2,493 openings), and Michigan (30 percent, 3,557 openings). Yelp pointed out that each of these states eased restrictions throughout March, such as allowing indoor dining capacity at 50 percent or more and reducing limits on mass gatherings. The states with the largest amount of openings in Q1 were the obvious ones—California (22,157 openings), Texas (14,860 openings), Florida (14,793 openings), and New York (7,080 openings).

In terms of restaurant and food business openings, these states had the best quarter-over-quarter results: Wyoming (59 percent, 27 openings), Alaska (58 percent, 41 openings), Kentucky (44 percent, 204 openings), Nebraska (26 percent, 68 openings), and Maine (6 percent, 73 openings). 

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As one might imagine, business reopenings have witnessed a spike, as well. According to Yelp’s data, 258,191 businesses have reopened since March 1, 2020. An average of 17,104 businesses reopened in Q1, which is the most since Q2 2020 when several states restarted their economies for the first time after tight shutdowns. 

“After a challenging year, 2021 is off to an encouraging start for the local economy, with Yelp data signaling a recovery as new business openings and business reopenings soar in the first quarter,” Justin Norman, Yelp’s vice president of data science, said in a statement. “… Along with a downward trend of nationwide COVID-19 cases and an increase in vaccinations, these are all promising signs of rebounding local economies.”

These food categories saw more than 50 percent of their reopenings come in Q1 during the August to March period: bars (3,146 Q1 reopenings), sandwich shops (2,366 Q1 reopenings), coffee houses (2,330 Q1 reopenings), and breakfast and brunch spots (1,861 Q1 reopenings).

In addition, these states witnessed more than 65 percent of their reopenings come in Q1 during the August to March period: Arkansas (302 Q1 reopenings), Delaware (140 Q1 reopenings), Mississippi (287 Q1 reopenings), Maryland (951 Q1 reopenings), Tennessee (872 Q1 reopenings), and Texas (5,331 Q1 reopenings).

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Nearly all signs are pointing toward a significant boom this summer. A growing list of states—from California and Nevada on the West Coast to North Carolina in the East—are expecting to lift all COVID restrictions by June. More than 134.4 million people have received at least one vaccine dose, which is more than 51 percent of adults, and more than 87.5 million are fully vaccinated, which is 33.8 percent of adults. 

Additionally, a recent survey of 8,943 small business owners between March 27 and April 5 showed that 35 percent of restaurants couldn’t cover rent in April, a 28-point improvement from March, according to online referral network Alignable.

The combination of stimulus checks and vaccinations have boosted consumer confidence and spending power in the past two months. That comes as hundreds of thousands of restaurants await the rollout of the $28.6 billion Restaurant Revitalization Fund, which will target independent concepts and chains with 20 units or less. 

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