Evaluating six major cities across the U.S., Yelp data shows that the average yearly business growth in non-downtowns has almost tripled that of downtown areas from April 2020 to April 2022, compared with between April 2017 and April 2019.
Growth of business not in the downtown area grew by 313%, on average, while downtown business grew by 116%. It's not surprising given the chaos most major cities have experienced in the past two years.
One thing is certain: brands will need to shift attention to other geographic areas to reach consumers.
The report from Yelp also analyzes how the number of existing businesses in 2022 has changed compared with the pre-pandemic average, finding that neighborhoods not in the downtown area grew significantly more than downtown neighborhoods in Portland, San Francisco, Austin, Chicago, and New York City. Food businesses and restaurants are seeing more growth in neighborhoods not in the downtown area, compared with other types of businesses.
The neighborhoods outside of downtown Portland grew by 157% more than downtown – the greatest difference in business growth between downtown and non-downtown areas of all the cities evaluated.
Not surprisingly, businesses shutdown due to the pandemic in downtown Portland when nearly 200 days of protests during that time may have contributed to neighborhoods outside the downtown area recovering faster than downtown.
Prior to the pandemic—between 2017 and 1019—the average yearly business growth was very similar, downtowns vs. non-downtowns, for main metropolitan cities.
Although downtowns and non-downtowns are both continuing to grow during the pandemic—2020 through 2022—the average yearly business growth in non-downtowns has almost tripled that of downtowns.
Businesses outside the downtown area show some remarkable growth. Business growth in Austin, outside the downtown area, grew by 74% more than its downtown areas. Business growth in San Francisco, outside the downtown area, grew by 88% more than its downtown areas.
New York outside the downtown area grew by 60% more than its downtown areas, Chicago grew by 68%, and Miami by 7%.
Food businesses, restaurants, nightlife and bars, as well as hotels and travel businesses are saw higher yearly average business growth in non-downtowns than in downtowns during the pandemic compared to the pre-pandemic average.
In non-downtown neighborhoods of most cities evaluated, businesses in the food category saw the highest growth during the pandemic compared to pre-pandemic – Austin, Chicago, Miami, New York, and Portland, non-downtowns are seeing food business growth at 12%, 8%, 26%, 8% and 8%, respectively.
In San Francisco restaurants drove the most business growth, 4%, outside of the downtown area.