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Wagamama Ramen.jpg Photo courtesy of Wagamama
Ramen is one of the fastest growing categories for new restaurant openings.

New restaurant listings grew by 10% on Yelp in the past year

Yelp’s State of the Restaurant Industry Report indicates staggering growth in pop-up restaurants, despite a return to relative normalcy.

The concept of a “pop-up restaurant” – which essentially began as “supper clubs” in the 1960s – didn’t begin appearing on Google Search until around 2009. At the height of the pandemic, these temporary restaurants began, well, popping up even more, both as a workaround for widespread dining restrictions and as a cost-saving solution. According to new research released today from Yelp, pop-up concepts don’t appear to be slowing down, despite a return to relative normalcy.

Yelp’s State of the Restaurant Industry Report 2023 indicates that the amount of new pop-up restaurants grew by a whopping 105% from April 2022 to March 2023. Yelp notes this industry trend continues to see quick-service pop-ups share spaces with breweries, bars and “even restaurants.” Various styles of pop-up restaurants come and go in markets quite often, including recent high-profile examples like Netflix Bites, Malibu Barbie Café and The Golden Girls Kitchen.  Notably, some pop-ups gain enough interest to translate into a brick-and-mortar location.

Another key takeaway from Yelp’s report is that the restaurant industry overall experienced a 10% gain in new business openings from April 2022 to March 2023, versus April 2021 to March 2022. For context, such business openings refer to the new businesses listings on Yelp in a given timeframe. That 10%, by the way, is despite the past two years of persistent challenges – including historic labor shortages, rising interest rates, and inflationary pressures.

These are the biggest growth segments for new restaurant openings in the U.S. in the past year:

  • Ramen, 45%
  • Noodles, 40%
  • Chicken Shop, 28%
  • Tacos, 28%
  • Food stands, 23%
  • Breakfast and brunch, 20%
  • Japanese, 20%
  • Sushi, 13%
  • Steakhouses, 9%

Yelp’s data confirms the horse is coming before the cart here, or, rather, consumer demand is driving most of these openings. Consider ramen as an example – a category expected to grow by over 7% annually through the next 10 years. More such concepts are expected accordingly.

At this point, consumers seem willing to try new restaurant concepts, as Yelp’s data finds that restaurant spending was up 3% year-over-year. Arts/entertainment and nightlife/bars spending was also up – 6% and 5%, respectively – illustrating a continued demand for social experiences as other discretionary spending categories – like beauty services and shopping – decline.

Also, that 9% uptick in steakhouses is notable given the backdrop of an uncertain economic environment and an increasingly discerning consumer set. In fact, Yelp analyzed consumers’ interest in restaurants across different price points and found that more consumers are seeking higher-end dining experiences. Consumer interest in low price-point restaurants decreased by 4% nationally, while consumer interest in higher-priced restaurants rose by double digits compared to pre-pandemic levels. This is the second year in a row searches on the higher end of the pricing barbell have experienced remarkable search growth, perhaps indicating that consumers searching for restaurants on Yelp – and there are tens of millions of them – are a bit drive-thru fatigued.

Some other key takeaways from Yelp’s latest report include:

  • Consumers are making reservations earlier. In 2023, 10% of all diners were seated between 2-5 p.m., which is double the amount of reservations during that timeframe in 2019.
  • 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.) 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.
  • Saturday remains the king of reservations. Saturdays account for 30% of weekly reservations, followed by Sunday and Friday (23% and 19% of weekly reservations, respectively).

Contact Alicia Kelso at [email protected]

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