Determining the exact number of businesses that never reopened is complex because some closures were temporary while others were "excess exits"—permanent shutdowns above the normal yearly rate. [1, 2]
According to official and industry data, here is the breakdown of businesses that closed and never reopened during the pandemic:
## Key Permanent Closure Statistics
* Total Permanent Closures (Initial Phase): By late August 2020, nearly 98,000 businesses listed on Yelp had closed permanently, representing roughly 60% of all businesses that had shut down since the pandemic began.
* Annual Business Exits: In the 2020 calendar year, there were approximately 1.1 million total business exits, which was about 181,000 more than the pre-pandemic yearly average.
* Quarterly Impact: During the second quarter of 2020 alone, an estimated 330,000 establishments exited permanently, which is significantly higher than the typical quarterly average.
* Excess Closures: Research from the [Federal Reserve](https://www.federalreserve.gov/econres/notes/feds-notes/business-entry-and-exit-in-the-covid-19-pandemic-a-preliminary-look-at-official-data-20220506.html) suggests that "excess" establishment exits—those directly attributed to the pandemic's first year—totaled roughly 200,000. [1, 3, 4, 5, 6]
## Sectors With the Most Permanent Closures
Based on data from Yelp and the [Federal Reserve](https://www.federalreserve.gov/econres/feds/files/2020089r1pap.pdf), specific industries faced much higher permanent failure rates:
* Restaurants: Roughly 61% of closed restaurants (nearly 20,000) indicated they would never reopen.
* Retail: About 58% of closed retail businesses (over 17,500 locations) became permanent closures.
* Beauty & Fitness: Approximately 42% of beauty businesses and a significant number of fitness clubs that closed initially did not return. [7, 8, 9, 10]
## Why Reopening Rates Dropped
New York Fed economists noted that the longer a business remained closed, the less likely it was to ever reopen. By May 2021, an analysis found that for every additional week a business stayed shuttered, its probability of reopening dropped by 2 percentage points. [11]
[1] [https://www.federalreserve.gov](https://www.federalreserve.gov/econres/notes/feds-notes/business-entry-and-exit-in-the-covid-19-pandemic-a-preliminary-look-at-official-data-20220506.html)
[2] [https://www.sciencedirect.com](https://www.sciencedirect.com/science/article/abs/pii/S0164070422000210)
[3] [https://www.federalreserve.gov](https://www.federalreserve.gov/econres/notes/feds-notes/business-entry-and-exit-in-the-covid-19-pandemic-a-preliminary-look-at-official-data-20220506.html)
[4] [https://www.abi.org](https://www.abi.org/feed-item/nearly-60-percent-of-covid-19-business-closures-are-permanent-report)
[5] [https://www.cnbc.com](https://www.cnbc.com/2020/09/16/yelp-data-shows-60percent-of-business-closures-due-to-the-coronavirus-pandemic-are-now-permanent.html)
[6] [https://www.businessinsider.com](https://www.businessinsider.com/small-business-closures-pandemic-less-expected-past-year-fed-survey-2021-4)
[7] [https://fee.org](https://fee.org/articles/yelp-60-of-business-closed-during-pandemic-are-permanent/)
[8] [https://www.facebook.com](https://www.facebook.com/kvoa4/posts/sound-off-its-not-known-how-many-businesses-have-failed-in-the-pandemic-but-the-/4079681958731117/)
[9] [https://en.wikipedia.org](https://en.wikipedia.org/wiki/Impact_of_the_COVID-19_pandemic_on_the_restaurant_industry_in_the_United_States#:~:text=Directory%20and%20review%20site%20Yelp%20in%20July,2020%2C%20Coca%2DCola%27s%20net%20revenues%20decreased%20by%209%25.)
[10] [https://fee.org](https://fee.org/articles/yelp-60-of-business-closed-during-pandemic-are-permanent/)
[11] [https://www.cbsnews.com](https://www.cbsnews.com/news/small-businesses-services-sector-wont-reopen-after-closing-covid-19/)
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