A special report from Womply Research

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

If you've read our full report, you've already got a sense for just how important review sites are for local businesses. But what about local convenience stores, bakeries, grocery stores, butcher shops, and similar businesses?

Are reviews more (or less) influential on revenue for food and beverage shops than other types of local businesses?

Impact of Reviews on Revenue page masthead graphic. A special report from Womply Research.

To understand the correlation between reviews and revenue for food and beverage shops, Womply's data science team conducted an in-depth analysis of transactions and online review data for more than 12,000 food and beverage businesses in every state.

Key findings include

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Local food and beverage shops that claim their free listings on 3 or more review sites earn 19% more revenue

Food and beverage shops that don't reply to any reviews earn 10% less revenue

5-star rated food and beverage shops have below-average sales—the sweet spot is 4 to 4.9 stars

Local food and beverage shops with more than the average number of reviews bring in 30% more in annual revenue

Food and beverage shops whose total number of reviews are 20-25% negative average 24% more annual revenue than businesses whose reviews are 0-5% negative

Go deeper by reading our analysis for businesses in a different industry.

Claiming free listings

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Food and beverage shops that claim their listing on multiple review sites make more money

Key findings include

Food and beverage shops that claim their free listings on 3 review sites or more earn 19% more revenue

Food and beverage shops that don't claim their listing on any review sites earn 10% less revenue

44% of food and beverage shops haven't claimed any of their free review site listings

Google is the most important free listing site for food and beverage shops

The average annual revenue across all food and beverage shops in our study was $227,000. As with all business in our study, claiming your profile on more review sites correlates with more annual revenue.

Food and beverage shops that don't claim their profile on one of the major listing sites earn 10% less revenue than the average food and beverage business. Meanwhile, those who claim even one free listing profile earn 5% more.

When food and beverage shops claim their free listing on review sites, it gives them the ability to reply to reviews, add helpful information about their business, and plenty of other things that clearly make an impact on potential customers.

Bottom line: food and beverage shops who claim their free listings on Google, Yelp, and Facebook average $43,000 more each year than shops that don't claim any of their free listings.

Today, customers use Google Maps to look for local food and beverage shops in their neighborhood more than any other resource. Which is a likely reason why food and beverage shops that don't claim their Google listing show the largest decrease in annual revenue.

No matter which way you look at it, though, food and beverage shops should be claiming their business listing on every applicable review site.

Go deeper by reading our analysis for businesses in a different industry.

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Replying to reviews

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People spend more money at local food and beverage shops that reply to reviews

Key findings include

85% of food and beverage shops don't respond to any reviews

Food and beverage shops that respond to just 1 review earn 8% more than average

Shops that don't reply to any reviews earn 3% less in annual revenue

Locations that respond to reviews on a semi-regular basis earn 17% more in annual revenue

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.

Go deeper by reading our analysis for businesses in a different industry.

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Star ratings

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How much does a food and beverage shop's star rating impact revenue?

Key findings include

Food and beverage shops with a rating between 4 and 4.9 stars earn more revenue than any other rating

5 star shops earn less in revenue than 1 to 1.5 star shops

Locations with a 3.5 to 4 star rating earn 13% more in annual revenue than average

Only 4% of food and beverage shops have lower than a 3-star rating

Now that we've discussed things that a food and beverage business owner can control when it comes to review sites, let's get into the reviews themselves. We'll begin with what many food and beverage business owners consider the most important part of their online presence—their overall star rating.

The chart below illustrates how much the average star rating matters to revenue at food and beverage shops.

As you can see, food and beverage shops appear to be more sensitive to ratings than other industries. Where businesses across all industries with a 3.5 to 4.5 star rating earn the most, the sweet spot for food and beverage shops is from 4 stars to 4.9 stars.

5-star food and beverage locations, however, perform similarly to 5-star businesses across all industries, earning far less revenue than average. This is possibly because most 5-star rated food and beverage shops are newer businesses, or may possibly engage in unethical techniques such as buying fake reviews.

Go deeper by reading our analysis for businesses in a different industry.

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Number of reviews

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How much does the number of reviews matter for food and beverage shops?

Key findings include

Food and beverage shops with more than the industry average of 53 total reviews earn 30% more in annual revenue than average

Food and beverage shops with fewer than 53 total reviews earn 9% less in revenue than average

Shops with 200 reviews or more earn 41% more than the average

An above-average number of reviews on Google has the largest positive impact on revenue of all review sites

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.

Go deeper by reading our analysis for businesses in a different industry.

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Fresh vs stale reviews

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Fresh reviews are crucial for food and beverage shops

Key findings include

Food and beverage shops average 6.6 fresh reviews (posted in the last 90 days)

Locations with more than 6 fresh reviews earn 30% more than average

Food and beverage shops with no fresh reviews earn 20% less than average

Food and beverage shops with 25 or more fresh reviews earn 41% more in annual revenue

The number of reviews a food and beverage business has on review sites is clearly important, but how important is the "freshness" of those reviews?

The average total number of fresh reviews, (reviews posted within the past 90 days) per food and beverage business in our analysis was 6.6. This is slightly lower than the average across all industries, continuing the theme of food and beverage shops receiving fewer consistent reviews than some other businesses.

We started by examining how much it affected a food and beverage location's revenue if they'd received fewer or greater than 6 reviews in the past 90 days, or if they'd received no new reviews at all.

Getting new reviews is important for food and beverage shops. Those who don't bring in any fresh reviews in the past three months days earn 20% less revenue than average. Getting a few fresh reviews helps, but those with a below average number of fresh reviews (1 to 6) still earn 4% less than average.

Getting more than the average number of new reviews, on the other hand, correlates with a 30% increase in revenue. This suggests consumers may put a premium on up-to-date reviews and might be more likely to patronize a food and beverage business with an abundance of recent customer feedback.

Breaking this down even further, we can see that food and beverage shops with just 3 to 6 fresh reviews (again, fresh means posted in the last 90 days) earn 31% more than those with no new reviews.

Food and beverage shops with 25 or more fresh reviews, meanwhile, earn 41% more than the typical food and beverage business. Put simply, getting just 8 to 9 new reviews per month correlates with an extra $93,000 each year for local food and beverage shops.

The takeaway is that food and beverage shops should focus on getting a steady stream of genuine, fresh, recent reviews rather than trying to maintain a perfect star rating. And, even a handful of fresh reviews clearly is more valuable than glowing reviews from last year.

Go deeper by reading our analysis for businesses in a different industry.

Read More

Impact of negative reviews

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Customers expect to see negative reviews of food and beverage shops

Key findings include

18% of the average food and beverage shop's reviews are negative

Food and beverage shops whose reviews are 5 to 20% negative earn the most

Food and beverage shops whose reviews are 0-5% negative earn 14% less than average

Food and beverage shops whose reviews are 20 to 25% negative still earn 6% more than the average business

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.

Go deeper by reading our analysis for businesses in a different industry.

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Kindest and harshest states for reviews

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Where in the U.S. are consumers kindest (and harshest) to food and beverage shops in reviews?

Next we analyzed online reviews at a state-by-state level to see which parts of the country are kindest (and harshest) in their reviews of local food and beverage shops.

rank state positive review rate
FL TX NM AZ AK CA NV UT CO OR WA ID HI OK MT WY ND SD NE KS MN IA MO AR LA MS AL GA SC IL WI MI IN OH TN KY NC WV VA PA NY ME VT NH RI CT NJ DE MD MA DC

New Hampshire, South Dakota, and Maine food and beverage shops are all tied for the best reviewed in the country with an average positive review rate of 88%. But very little separates the best reviewed states for food and beverage shops, as 17 states average a positive review rate of 85% or greater.

In fact, Americans in every state are generally favorable in their reviews of local food and beverage shops. Even Nevada, the lowest-ranked state, has an average positive review rate of 76%. This suggests that when it comes to leaving a review of a food and beverage shop, people are far more likely to leave a positive review than a negative one.

Go deeper by reading our analysis for businesses in a different industry.

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States best at managing online presence

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Where in the U.S. are food and beverage shops the best at managing their online presence?

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.

rank state claimed at least one listing
FL TX NM AZ AK CA NV UT CO OR WA ID HI OK MT WY ND SD NE KS MN IA MO AR LA MS AL GA SC IL WI MI IN OH TN KY NC WV VA PA NY ME VT NH RI CT NJ DE MD MA DC

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.

rank state responded to at least one review
FL TX NM AZ AK CA NV UT CO OR WA ID HI OK MT WY ND SD NE KS MN IA MO AR LA MS AL GA SC IL WI MI IN OH TN KY NC WV VA PA NY ME VT NH RI CT NJ DE MD MA DC

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.

Go deeper by reading our analysis for businesses in a different industry.

Read More

Conclusion

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Conclusion

Online reviews are the new word of mouth in the digital age. Local food and beverage shops that engage consumers online perform better financially than those that don't.

Specifically, local food and beverage shops experience the best revenue performance when they:

  • Claim all their free business listings on relevant review sites
  • Are highly responsive to customer feedback posted on review sites
  • Get and maintain a star rating between 4.0 and 4.5 on key review sites
  • Receive a steady flow of genuine reviews from real customers
  • Have an authentic review profile, comprised of about 15-35% negative reviews

Go deeper by reading our analysis for businesses in a different industry.

Read More

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