Some big chain restaurants are in trouble, it’s clear. Their sales are decreasing. Last quarter was their weakest since the recession. Blame millennials! And now, some more bad news: Their Yelp ratings are suffering.

According to the second edition of Yelp’s Local Economic Outlook, released Tuesday, fast-food chain restaurants have lost about 16 percent of their average rating overall in the past five years — equal to about one-third of a star. Fast- ­casual chain restaurants haven’t been immune: They’ve lost about one-tenth of a rating point over approximately the same period.

At the same time, the ratings for independent restaurants have continued to rise. Both independent fast-food and independent fast- casual restaurants have seen a 7 percent increase. Ratings for ­casual-dining chain restaurants — such as Outback Steakhouse and Olive Garden — have remained unchanged, though Yelp says they continue to be bested by independent dining, which gained a quarter of a rating point over the past five years.

“Independents really are performing more strongly nationally,” said Carl Bialik, data science editor at Yelp. “They had a lead five years ago, but every quarter they have extended that lead.”

The national average rating for a location of a fast-food chain in 2012 was 3.18 stars out of the maximum five — and by 2017, it had dropped to 2.82. But fast-food restaurants that weren’t part of a chain started out with an average of 3.65 stars, which increased to 3.85 over five years.

The concept of an independent fast-food restaurant might seem a little strange, but Yelp’s data explains: Restaurants with that classification are those that share qualities with fast-food chain restaurants — like Washington’s many carryouts — but are independently owned. Yelp classified as a chain any restaurant that had five or more locations with the same name, of the same type. Anything with two to four locations was not included, said Bialik, because there could be restaurants that coincidentally have the same name. A fast-casual restaurant, said Bialik, would be a restaurant whose reviews indicate a higher level of service or customization within a counter-service format, like a poke shop or an arepa restaurant. There are wide variations by city: New York’s restaurants are largely independently owned, with only about 35 percent of its fast-food restaurants part of a chain, while Phoenix is chain-dominated, with 80 percent of its fast-food restaurants operating as part of a chain.

Yelp reviews matter the most for independent restaurants. One Harvard Business School study found that a one-star increase in Yelp rating leads to a 5 to 9 percent increase in revenue for independent restaurants, but star value doesn’t really affect the revenue of a chain restaurant. The positive Yelp reviews of independent restaurants tend to crowd out chains, and may influence people to choose an independent restaurant instead by elevating its profile. According to the Harvard study, higher Yelp penetration in a particular market causes an increase in revenue for independent restaurants but a decrease in revenue for chain restaurants.

“I think some of this is a reflection that if you do like a chain and know what you’re getting from that chain, and you get that experience and you’re pleased, you might not be moved to write a review because it’s what you expect from that chain,” Bialik said.

But it’s not just about why people do or don’t write Yelp reviews for certain types of restaurants. The shift away from chains has been happening for years, a result of consumer preferences toward dining they perceive to be unique and authentic.

 

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