Inflation: Americans are still dining out — but want experiences, Yelp finds

Alexandra Canal
·Senior Reporter
Updated 3 min read
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In this article:

More consumers are dining out, despite elevated inflation, and they are actually paying up for experiences.

"After two years of lockdowns and restrictions, consumers are eager to return to celebrating special events with friends and family at restaurants where they know they will be well taken care of," Yelp VP of Product Anthony Cross told Yahoo Finance.

According to Yelp's newly published State of the Restaurant Industry Report, experience-dining options like conveyor sushi, dinner theater, internet cafes, supper clubs, and themed cafes all saw significant increase: These categories were up 500%, 240%, 200%, 200%, and 75%, respectively.

More than 13 million diners were seated via Yelp during Q1 2022, according to Yelp, a rise of 48% compared to the year-ago quarter. And inflation is still on the minds of diners: Yelp reviews mentioning increased prices rose for the quarter (+25%).

Movie fans fill out their award predictions before an Oscars watch party at the Stuart Cinema & Cafe, in Brooklyn, New York City on April 25, 2021. REUTERS/Caitlin Ochs
Movie fans fill out their award predictions before an Oscars watch party at the Stuart Cinema & Cafe, in Brooklyn, New York City on April 25, 2021. REUTERS/Caitlin Ochs (Caitlin Ochs / reuters)

Searches for reservations on the app also saw a noteworthy uptick, rising 107% year-over-year. Indoor dining searches shot up 6,360% amid easing COVID-19 restrictions while outdoor dining searches remained strong, up 1,060% over the same time period.

"100% we're back to where we were pre-pandemic," André Vener, a partner at national hot dog eatery Dog Haus, told Yahoo Finance. "People who were stuck at home for two years want to come out and socialize."

Vener emphasized that his brand has focused more heavily on the overall dining experience, too, as price hikes become more and more inevitable.

"What we're doing differently is we're trying to have the best customer experience possible," Vener said, stressing clean restaurants, a "perfect" playlist, and top notch service. "That way, people will say, 'Hey, I had a good time there.' Rather than looking at a receipt, they're looking at an experience."

Takeout demand for the quarter, although 31% less than last year, was still up 107% versus Q1 2020 and up 144% compared to Q1 2019 — demonstrating that "takeout has become a pandemic trend that may be here to stay," according to Yelp.

"Takeout is going to be a lot of the future," Vener said, stressing that people do not want to pay added delivery fees in an already-high inflationary environment. "Convenience is very important, but I think the reality of just pick-up and not paying delivery fees will be a big, big factor for a lot of people."

'Labor is not easy'

According to Yelp's report, restaurant review mentions of long wait times and short staffing rose 23% and 229%, respectively.

"Labor is not easy," Vener said. "Anybody who says right now that labor issues are not a problem is definitely not being honest," he added, underscoring that attracting new talent has been "one of the hardest things. We have stores that we still haven't opened because we need to hire a full staff of 40 people at once... that's been a challenge for us."

To continue operations with a limited staff, Dog Haus has leaned on "ghost kitchens," virtual eateries which operate solely to serve delivery efforts as more consumers adopt platforms like DoorDash (DASH), Grubhub, and Uber Eats (UBER).

Yelp recently launched a feature that allows restaurants to tag themselves as "virtual." The platform said more than 3,000 businesses have added the attribute to their business pages since it first became available in September 2021.

Vener noted that delivery makes up about 21% of overall sales across all of Dog Haus' 75 locations, with some locations seeing as much as 50%.

Alexandra is a Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com

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