Over 13 million diners return to restaurants: Yelp data

Yahoo Finance's Allie Canal breaks down Yelp data on people returning to restaurants and takeout orders slowing.

Video transcript

BRIAN SOZZI: Demand is on the rise for in-person dining, despite rising inflation, with a new Yelp report showing a reversal for the restaurant industry. Yahoo Finance's Alexandra Canal joins us now with the details. Alex?

ALEXANDRA CANAL: Hi, guys. Yes, Yelp is out with their State of the Restaurant industry report, and there are some interesting little tidbits in there. According to the report, more than 13 million diners were seated via Yelp during Q1 2022. That's a rise of 48% compared to the year ago quarter. Now, reviews did mention obvious staffing shortages, longer wait times, along with those higher menu prices, which by the way, jumped 7.4% during the month of May, according to the latest CPI print.

But despite all of that, consumers, although they're aware of inflation, they're actually wanting to spend money on more higher-end, upscale experiences. So I guess they figured, if prices are up everywhere, we might as well go big or go home. Why not? So we're seeing that on the rise, in addition to takeout on the rise, too. Although that did dip slightly on a year-over-year basis, we are still seeing numbers up compared to 2020 and 2019. So that shows that that could possibly be another pandemic-era trend that will continue.

BRAD SMITH: Yelp also noticed an uptick in experience dining here. So break this down for us. Like, what exact experiences are consumers gravitating to in this climate?

ALEXANDRA CANAL: The fun stuff, Brad.

BRAD SMITH: OK, all right, cool.

ALEXANDRA CANAL: So think conveyor sushi. Think dinner theater.

BRAD SMITH: Conveyer--

ALEXANDRA CANAL: Yes, dinner theaters--

BRIAN SOZZI: I have no idea what that--

ALEXANDRA CANAL: Supper clubs, internet cafes.

BRAD SMITH: You just stand at the end of the belt.

BRIAN SOZZI: Yeah, somehow.

ALEXANDRA CANAL: You know, I've been to dinners-- I have been to dinners, though, where you sing and you dance, and I think that's fun. I think it relates to the fact that people were stuck inside for two years during the pandemic. Yes, there is inflation, but they want to get out there. They want to have fun.

They want to experience different types of things, different types of dining experiences. You're seeing there all the different options that are available to people. So I think this just speaks to the fact that people want to spend more on experiences, and there you have it.

BRIAN SOZZI: You would appreciate this. I paid $24 for a Chipotle bowl this week, having it delivered. If I'm going to pay this, I'm going back to--

BRAD SMITH: Because it was delivered.

BRIAN SOZZI: I want-- yeah, well, I want to get this experience. I want to smell burritos. I want to smell beans.

ALEXANDRA CANAL: Exactly, and that's why I also think takeout is actually going to be more popular. Because for me, anecdotally, I'm not going to spend $10 to $20 more to get it delivered. I'd rather drive or walk and just pick it up at the window because the fees are insane. And it's only compounded by inflation, too.

BRIAN SOZZI: How do you think this is impacting-- we've seen menu prices go up through the roof.

BRAD SMITH: Yeah.

BRIAN SOZZI: But I wonder how the likes of Darden are starting to feel this impact here, as well?

ALEXANDRA CANAL: Yeah, and they report earnings next week, so I'm sure that we're going to get a little bit of an update on that. I think it is reassuring that in-person dining is returning. And also, there's a ton of demand for both outdoor and indoor, which is interesting. I guess people are more comfortable with the pandemic at this point. So I do wonder how that will impact Darden's bottom line.

BRIAN SOZZI: It cost you $20 to actually drive to an Olive Garden.

ALEXANDRA CANAL: Right.

BRAD SMITH: It did.

BRIAN SOZZI: About 10 miles away, $6 a gallon.

BRAD SMITH: By the time you-- you've already factored in the delivery cost at that point.

ALEXANDRA CANAL: It's crazy. It's crazy out there right now.

BRAD SMITH: Two things really quickly on this conversation, though-- on what head count are they going to see this kind of interest continue to tick higher? And then additionally, I mean, operationally, they are looking at different days that they're even-- like, one of my favorite spots in Bushwick, I'll shout them out, Forrest Point. I'm there all the time. And they have refined the number of hours and days that they are actually operating.

And so, so many restaurants have already done this, in addition to adding on the delivery options and so forth. So what is the realistic equation look like for them? What type of staffing are they going to need necessary in order to give the people the experience that they want when they're coming out of kind of the work-from-home, everything from home hibernation?

ALEXANDRA CANAL: Staffing is certainly probably the biggest issue that all restaurants are facing. So they're having to get a little bit creative to bring in different types of revenue-- ghost kitchens actually becoming very popular. Yelp added a feature in September that you could label your business as virtual. Since they did that, 3,000 businesses have said that they have ghost kitchen operations. So that has helped alleviate some of that staffing pressure, but that is certainly an issue that's going to have to be addressed. You need to potentially do benefits, higher pay. How do you get people to work when no one really seems to want these jobs right now? And that's going to continue to be a challenge for them.

BRIAN SOZZI: There better be people at my local Wendy's because I'm ordering Wendy's tonight. I just decided right now.

ALEXANDRA CANAL: Oh, a Frosty?

[INTERPOSING VOICES]

BRAD SMITH: He's a Baconator fan.

BRIAN SOZZI: I'm getting three chicken sandwiches.

ALEXANDRA CANAL: And a Frosty. Add a Frosty to my list.

BRAD SMITH: All right. Stick around out, Allie.