A survey that appeared in Forbes magazine recently provided some interesting data on the consequences of shopping locally – that is, shopping at the independent retailers of your neighbourhood, as opposed to shopping locally at big box and chain stores.
The study applied to American markets, but the results would likely be applicable to Canadian markets as well.The study’s authors found that for every dollar spent at a locally-owned establishment, nearly 45 per cent of that revenue stayed in the local community with another nine per cent being spent elsewhere in the state.
These expenditures included employee wages/benefits, inventory, supplies, and services from other local local businesses, profits accrued to the local owners, state and local taxes, and charitable contributions.
In contrast, for every dollar spent at a chain store, only 14 per cent of the revenue stayed in the local community, mostly in the form of payroll. The balance of that money flows to out-of-state suppliers, or back to the parent corporation.
Based on these numbers, three times as much money stays in the community when shopping at a locally-owned business vs. shopping at a chain store.
It’s interesting data to consider as we enter what is probably the slowest retail market of the year for local businesses.
There are benefits to shopping locally that aren’t always apparent when we open our wallets. It’s something worth remembering over the next few months as local retailers struggle to get through the winter season.