How do online reviews impact revenue for local food and beverage shops?

It's clearly important for food and beverage shops to claim their listings on as many review sites as possible, but they shouldn't just stop there. Our analysis reveals that food and beverage shops should engage with their customer reviews.

85% of all food and beverage shops in our analysis haven't responded to a single review, which is an even larger percentage than the 75% of businesses across all industries that haven't responded to any reviews. But like businesses across all industries, food and beverage shops who don't engage with their customers online earn less money than average.

As you can see in the charts above, food and beverage shops that engage with customers by replying to reviews earn more money.

Food and beverage shops that reply to their reviews between 1 and 25% of the time earn 17% more revenue than average. Interestingly, the increase in revenue drops slightly as review response rate rises.

This is likely because food and beverage shops with a large number of total reviews are very popular and well-established, and may be likely to earn more money than average, but may also be very busy and more likely to have a lower review response percentage.

This becomes clear when you look at food and beverage business revenue by total number of review responses:

Food and beverage shops that responded to at least 1 review responded to a total of 16 reviews on average. And even food and beverage shops that respond to just one review earn more money than average.

Food and beverage shops who respond to even just one review earn 8% more than average, showing even a little engagement can go a long way. But, as you can see, the more responses, the better.

By the time you get to food and beverage shops who respond to more than 50 reviews, they're earning over $100,000 more each year than average.

When it comes to responding to reviews, it's clear that food and beverage shops should focus on taking the time to give genuine responses to both negative and positive reviews.

Food and beverage business owners often stress about their star rating, but as you can see in the section above, star rating doesn't necessarily have the clearest connection with increases in revenue. On the other hand, our findings suggest that food and beverage business owners should perhaps focus much more on increasing the number of reviews than almost anything else.

Food and beverage shops in our analysis averaged 53 reviews on review sites. This is less than the 82.5 average across all businesses, suggesting food and beverage shops may need to work somewhat more than other industries to get reviews.

We analyzed the revenue of food and beverage shops whose review counts fall above and below that average 53 review threshold.

The results of this analysis revealed a strong positive correlation between review count and sales revenue.

Food and beverage locations with more than the average number of reviews earn 30% more in annual revenue than businesses with review counts below the average, while those with less than the average number earn 9% less than the average food and beverage shop.

Looking closer at the numbers helps clarify any relationship between the number of reviews and an increase in average revenue.

Food and beverage locations with 1 to 10 reviews earn 23% less than average, while those with between 11 and 25 reviews earn right around the industry average. Once food and beverage shops get into the 26 to 53 review range, revenue climbs to 10% more than average.

Then, as you can see, the more reviews a food and beverage shop gets, the more money they earn. Annual revenue at food and beverage locations with more than 200 reviews is over $92,000 more than the average food and beverage shop, suggesting that a large number of reviews is far more appealing to customers searching online than almost anything else.

Google is clearly the most important for food and beverage when we look at individual review sites. Food and beverage shops with an above average number of reviews on Google earned 37% more than average.

Yelp is also rather important, as food and beverage shops with a below-average review count earn 14% less revenue than average.

Regardless of the platform, local food and beverage shops would be well-advised to get as many reviews on as many sites as possible. Even if some of those are negative reviews (which isn't necessarily a deal-breaker, as we'll explain below), there's little question that customers put more value in a higher number of reviews (or other factors) than they do in a 5-star rating.

It's clearly important to get a steady supply of fresh reviews, but how important is the ratio of positive to negative reviews?

We analyzed the total number of reviews each food and beverage shop in our study received, and on average, 18% of the reviews posted about a given food and beverage shop were negative.

So does a large number of negative reviews spell doom for food and beverage shops? Let's find out.

As you can see in the charts above, food and beverage shops appear to be more susceptible to a large number of negative reviews than other industries, but only slightly. The food and beverage shops that earn the most money are those with a healthy mix of positive and negative reviews.

Food and beverage shops with 5 to 25% negative reviews earn more than average, with shops whose reviews fall between 5 and 10% negative earning the most. But even shops whose reviews are 35 to 50% negative earn more than those whose reviews are only 0 to 5% negative.

Now, this is likely due to multiple factors, such as shops in that sample having a larger total number of reviews, but it's clear that a business owner shouldn't be overly concerned about getting bad reviews.

When customers browse food and beverage business listings on review sites, they likely expect to see some negative reviews. A business with few or no bad reviews might appear untested or even a little "too good to be true."

Our takeaway: food and beverage shops that focus on getting as many authentic reviews as possible reap the rewards.

We looked at which states' food and beverage shops were the best at managing their online presence. First we looked at the percentage of food and beverage shops in each state that had claimed at least one review site listing.

72% of Vermont food and beverage shops have claimed at least 1 business listing, which is good for the top spot nationwide, while nearby neighbor Maine is close behind with 71%.

On the other end of the spectrum, 64% of food and beverage shops in Mississippi haven't claimed a single listing, putting them at the bottom of the list.

Lastly, we looked at how frequently businesses in each state responded to reviews.

New Mexico food and beverage shops were the most engaged, with 26% of shops having responded to at least one review. Maine and Arizona round out the top three with 25% and 24%, respectively.

Mississippi shops were also the least engaged, with only 4% having responded to at least one review.