Consumers are faced with decisions to purchase goods and services from national chains or locally owned businesses every day. Cost, convenience, and variety often inform us in these decisions. And while we have heard of the intangible benefits of buying local, how do we quantify the specific economic benefits to our communities when we decide to keep our money close to home?
When we buy local, our money stays local, and it strengthens the local economy in two ways. First, buying local keeps money circulating within the local economy. Studies have shown that local businesses recirculate a greater share of every dollar as they create locally owned supply chains and invest in their employees.
Data shows that local retailers return 52 percent of their revenue back into the local economy, compared to just 14 percent for national chain retailers. Money circulating through the local economy benefits everyone who is a part of each transaction. For example, let’s look at a local farmer growing produce.
First, they sell to a local restaurant, which in turn prepares the fresh produce and sells it to local customers. The farmer pays its local employees and the restaurant uses revenue from sales to buy supplies from a neighborhood hardware store. This example illustrates how the recirculation of money in the local economy leads to a stronger financial foundation for our neighbors and communities.
Buying local also fuels new employment and job opportunities for people within our community. Studies show, locally owned businesses employ more people per unit of sales and retain more employees over time. For example, during the previous economic recession, the American Economic Review found that the employment growth rate of local businesses in 2008-2009 fell 2% less than national corporations. Furthermore, the expansion and growth of local businesses help create a more stable, recession-resistant local economy and community alike.
More data to buy local
- » A local business will generate 70% more local activity per square foot than a big box store
- » Local shops will produce a net annual return of $326 per 1,000 square foot compared to a net annual deficit of $468 per 1,000 square foot for big box stores
- » The money we spend locally will generate three and a half times more wealth for the local economy compared to chain-owned businesses
- » If every U.S. family spent an additional $10 per month at a local shop, the result would be an additional $9.3 billion directly returned to the local economy
- » Nearly 60% of workers at local businesses report a high commitment score to the business compared to only 39% at chains, which results in better customer service and an improved buying experience
- » Buying local helps immigrants; 28% of all main street businesses are owned and operated by immigrants and from 2000-2013, 48% of the overall US growth of business ownership was attributed to immigrant business owners
While buying local is financially compelling to our communities; the benefits to our environment are equally impressive. Buying locally reduces the processing of goods, packaging and transportation waste, which leads to less pollution. Each year, the United States transports and ships $2.2 trillion of products which equates to 1.1 billion gallons of fuel and 1 billion metric tons of CO2.
Communities that support local businesses foster an environment that’s characterized by unique, one of a kind business that often provides communities with economic advantage and a unique value proposition. Local ownership also means that community members take part in making important decisions that will affect the community. They’re more likely to take into consideration how business and investment decisions will impact the entire community as opposed to solely focus on business profitability. Additionally, buying locally means that you are supporting local entrepreneurs and innovation.
Spending locally is a great way to contribute to a friendly and long-term business environment and it can be one of the key engines of community economic success. Successful businesses greatly influence an area’s quality of life; if there’s more business, there’s more revenue, and there are more job opportunities; all of which contribute to better quality of life for us all.
There’s a massive cultural shift underway redefining the way people make buying decisions. We’re seeing more individuals concerned about the environment, about how products are made and sourced, where materials come from, and a company’s overall social and environmental impact.
Shift Workspaces believes in the power of supporting one another on a local level, which is why we constantly strive to purchase locally sourced products, partner with local vendors and re-invest the profits from our business back into our community.
Sources: www.epa.com, www.gsi-net.com, www.newmoa.org, www.clu-in.org, www.itrcweb.org, www.staticticbrain.com, www.census.gov, www.colorado.gov, www.greenstudentu.com, www.amiba.net, www.civiceconomics.com, www.sagepublications.com, www.as-coa.org