Yelp Reviews Show Growing Concern Over Inflation and Reduced Spending
Consumers Complain About Inflation in Reviews
The company released its Q2 2022 Yelp Economic Average (YEA) report on July 20. Mentions of inflation have risen by 28% compared to Q2 2021, the report showed. Inflation is especially rampant in casual restaurants, Yelp data suggests, where mentions of inflation in consumer reviews rose by 38%.
Other business sectors drawing attention for price increases due to inflation, based on Yelp reviews, include:
- Food businesses (up 36%).
- Arts & entertainment (up 33%).
- Nightlife businesses (up 30%).
- Event services (up 22%).
- Hotel & travel businesses (up 20%).
For the first time ever, Yelp reviews saw a significant number of mentions regarding “shrinkflation,” the phenomenon where manufacturers shrink package sizes while keeping the price the same. Customers are paying the same amount but getting less for their money — and are noticing.
Tops on the list of goods experiencing shrinkflation are hot dogs, burgers, and pizza, according to consumers. Fortunately, Costco’s iconic food court dog promises to remain the same price — and size — for the foreseeable future. But if you’re shopping elsewhere, you may not get the same value you used to on affordable convenience foods.
Consumers Willing to Spend More
However, there is a silver lining to the report, which may indicate American consumers’ willingness to adapt to rising prices without giving up the things and experiences they enjoy.
In spite of concerns about inflation, consumers are still seeking out pricier businesses. Compared to pre-pandemic levels, consumers searched for higher-priced businesses more often in Q2 2022.
However, the search for more expensive businesses has dropped quarter-over-quarter, the YEA report showed. Compared to the first quarter of 2022, users searching for the least expensive businesses, indicated by a $, increased by 7%, while the number of users searching for the highest priced companies ($$$$) decreased by 12%. Compared to the second quarter of 2019, however, searches for the highest priced businesses are up 55%.
EV Searches Grow
Rising gas prices have led to another change in consumer behavior: the search for electric vehicles. Searches for “electric vehicles” were up 97% compared to last year, the Yelp report stated. Compared to 2019, the search for EVs has more than doubled. A whopping 175% more consumers are looking to make the switch than they were pre-pandemic.
With the rise in electric vehicles also comes the pursuit of charging stations. There was a 23% increase in searches for EV charging stations in the second quarter of 2022 compared to last year. In April 2022, Yelp added a feature to allow users to search for EV charging stations. Since then, more than 5,200 businesses have listed their charging stations on the platform.
Expert Take on Yelp Data
As a one-stop platform to connect consumers with local businesses, Yelp’s data can deliver insightful analytics, allowing us to see how others are responding to rapidly changing economic conditions. While Americans haven’t entirely changed their habits in light of inflation, reviews seem to indicate that consumers are feeling the crunch. Regardless, it looks like consumers are still willing to spend.
“Despite rising inflation, activity on Yelp suggests that consumer spending remains strong as people search for higher-priced businesses more frequently than prior to the pandemic,” Pria Mudan, data science leader at Yelp, said in the press release.
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