Tens of millions of people come to Yelp to find great local businesses, whether they’re small independent businesses, regional chains or national brands. In fact, many use Yelp to find nearby chain restaurants and retail stores for favorite national brands. As consumers continue to experience higher prices due to inflation, Yelp data shows that consumer preferences for the types of businesses they frequent may be changing, as they increasingly turn to budget food and shopping options. To better understand how today’s macroeconomic environment is affecting where people are choosing to eat and shop, Yelp commissioned a survey, conducted by Material, to poll 2,000 Americans on their shopping and dining habits. It found that more than half of respondents (54%) are choosing to patronize more national chain restaurants and retailers as a direct response to the increasing cost of goods and services.*
Americans plan to save by turning to national and chain businesses
With inflation top of mind for nearly everyone in the U.S., many people are tightening their spending and putting more consideration into where they eat and shop. When considering today’s economy and high inflation rates, more than 3 in 5 respondents (62%) are trying to cut costs where they can everyday. Many respondents report that discount grocery stores (47%), discount retailers (41%) and fast food or fast casual restaurants (36%) are the most likely to maintain low prices, and as a cost cutting measure 42% say they are generally more likely to choose a less expensive business today. Similarly, nearly half of Americans (45%) report they are now less likely to eat at fine dining/higher priced restaurants than they were in 2020.
Generally, Americans who are more price-conscious perceive that national businesses will save them more money than local businesses. In fact, more than half of survey respondents (54%) are more likely to choose national businesses than local, small or independently owned businesses when spending their money. In response to high inflation, respondents report they’re twice as likely to visit a national or chain business than a local business for groceries (33% vs. 15%), and 1.5 times as likely when shopping for apparel (29% vs. 18%). About a quarter (27%) say they shop or visit national/chain retailers or restaurants more than they did before 2020. That said, about a third of respondents said they still generally try to support local businesses more (32%).
Younger generations are more likely to choose national brands and chains when shopping or dining out
High inflation rates are affecting people at different junctures in their lives and each generation is responding to economic pressures in unique ways. In today’s economy, older generations are proving to be more frugal and more likely to cut larger expenses out of their lives compared to younger generations. In fact, 76% of baby boomers (aged 58-76) and 63% of Gen X (aged 42-57) respondents say that they are trying to cut costs everyday, compared to 54% of millennials (aged 26-41) and 43% of Gen Z (aged 18-25). In addition, younger generations are turning to more national brands and chains as a cost cutting measure.
According to the U.S. Bureau of Labor Statistics, food has topped the charts as one of the categories with the highest inflation rates, increasing by nearly 11% year-over-year as of October. To help alleviate these increasing costs, about twice as many Gen Zers and millennials report that national or chain restaurants have helped them save on weekly food expenses compared to Gen X. This sentiment increases to nearly 4X when compared to baby boomers.
To help national and regional brands to reach this growing consumer base, we’re continuously innovating on new advertising solutions, such as Spotlight Ads, a new product that allows brands to leverage high quality video and images on Yelp’s homepage. According to internal Yelp data,** 83% of users say they purchase from a business they found on Yelp. With video continuing to be a critically important lever in reaching Gen Z, who are more likely to shop and dine at national retailers and restaurants as demonstrated by this survey, these new solutions are more important for brands than ever before.
*Material Survey 2022. This survey was fielded among 2,009 adults, ages 18+ in the United States. The survey was conducted online during the period of October 12-17 2022 and has a margin of error of +/- 2%. Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. In this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 2 percent, from the result that would be obtained if interviews had been conducted with all personas in the universe represented by the sample. The margin of error for any subgroups will be slightly higher. Material is a leading global insights firm serving as a partner to more than 100 of the Fortune 500 and thousands of smaller companies and organizations. For purposes of this analysis, Gen Z are those aged 18-25, millennials are those aged 26-41, Gen X are those aged 42-57, baby boomers are those aged 58-76. For more information about Material, please visit materialplus.io.
**Based on a survey conducted by Yelp in August 2022. Methodology used ComScore demographics to establish age and gender quotas to be representative of the Yelp user population within the U.S. and weighed data accordingly. This survey was fielded among 1,029 people aged 18+ in the U.S. People on Yelp reported use of Yelp at least once in the previous 3 months.