menu
Get a daily delivery of PSFK
Subscribe to get a daily digest of new ideas and discoveries and to find out about upcoming events

Chain Stores’ Revenue Affected By Yelp Reviews

Chain Stores’ Revenue Affected By Yelp Reviews

According to Michael Luca, more reviews on independent stores can decrease profits for chains.

Yi Chen


Michael Luca, an assistant professor at Harvard Business School, has made a compelling finding on how Yelp boosts revenue for smaller stores but has the adverse effect on chain stores and chain restaurants. Luca studied over 3,500 restaurants in Seattle, USA, from 2003 to 2009 and found that ratings on Yelp impacted the bottom line. A positive review for a small, local restaurant raised its profile but in turn, decreased revenue for a chain restaurant.

Luca’s early data also suggested that when more independent restaurants are covered on Yelp, it leads to an average drop in the chain’s revenue by 5%. Although the research only primarily focused on restaurants, Luca believes that the same findings could apply to various industries, from retailers to health practitioners.

Harvard Business Review Blog

{{post.author_display_name}}
  • {{post.date_formated}}
{{post.author_display_name}}
  • {{post.date_formated}}
Read More Tap to Expand
PSFK Writer {{post.author_display_name}}
  • {{post.date_formated}}
Get a daily delivery of PSFK
TREND REPORT

PSFK Labs Presents
The Future of Connected Life

Live Work Play Better
The New Consumer and Their Journey to Effectiveness, Balance & Personal Growth