Buy Local Studies

Locally-owned businesses are more likely to recirculate
your purchase dollars into payments to other local suppliers. Economists call this a “multiplier effect,” because it steers more jobs and sales-tax revenue into our own community. Several recent studies have found the multiplier benefits of local businesses to be up to three times those of non-local businesses.

A recent retail diversity study of San Francisco and
three Peninsula cities found that purchasing from locally
owned stores created about 70% more local jobs, and
67% more overall local income, per dollar spent. The
authors concluded that by shifting just 10% of purchases
to local businesses, consumers would add nearly 1,300
new jobs and $200 million in economic activity to the
cities studied.

But it's not just here in the Bay Area that studies conclude that buying from locally owned independent businesses makes a difference. Research around the country
has generated similar results.

Economic Impact Studies
(in Specific Industry Sectors)

Economic Impact Studies (by Geographic Region)

Impacts of Buy Local Campaigns

Economic Impact Studies (by Geographic Region)

• San Francisco
  The San Francisco Retail Diversity Study, May 2007, by Civic Economics

  Key findings:

• A slight shift in San Francisco consumer purchasing behavior - diverting just 10% of purchases from national chain stores to locally owned businesses - would, each year, create 1,300 new jobs and yield nearly $200 million in incremental economic activity.

• The reverse is also true - a 10% shift away from local merchants would have a negative impact of equal but opposite magnitude.

• Austin, Texas
  Economic Impact Analysis: Local Merchants vs. Chain Retailers, December 2002, by Civic Economics, Austin IBA. 

  Key finding:
  For every $100 in consumer spending at a national chain bookstore in Austin, Texas, the local economic impact was $13. The same amount spent at locally based bookstores yielded $45, or more than three times the local economic impact.

• Chicago, Illinois
  Andersonville Study of Retail Economics, October 2004, by Civic Economics
  This study was designed to evaluate the economic role played by the independent businesses of this dynamic district on Chicago's North Side.

  Key findings:

• Every $100 spent with a local firm leaves $68 in the Chicago economy; $100 spent at a chain store leaves $43 in Chicago.

• For every square foot occupied by a local firm, the local economic impact is $179, versus $105 for a chain store.

• Santa Fe, New Mexico
  Santa Fe Independent Business Report, November 2003, by Angelou Economics

  Key findings

• Small businesses account for 90 percent of all businesses in Santa Fe and employ 30 percent of all private sector workers.

• Dollars spent at independent businesses deliver twice the economic impact of those spent at national chains.However, national chains in Santa Fe are growing faster than independents - 2.5 times faster - and bring new competition and pressure to the small business community.

• Midcoast Maine
  The Economic Impact of Locally Owned Businesses vs. Chains: A Case Study in Mid-Coast Maine - September 2003, by Institute for Local Self-Reliance.
  This study tracked the revenue and expenditures of eight locally owned businesses in mid-coast Maine, as compared to big-box stores.

  Key findings:

• Locally owned businesses spent 44.6 percent of their revenue within the surrounding two counties, and another 8.7 percent elsewhere in Maine, largely on wages and benefits paid to local employees, goods and services purchased from other local businesses, profits that accrued to local owners, and taxes paid to local and state government.

• Big-box retailers return an estimated 14.1 percent of their revenue to the local economy, mostly as payroll. The rest leaves the state, flowing to out-of-state suppliers and back to corporate headquarters.

Impacts of Buy Local Campaigns

• Nation wide
  Survey Finds Support for "Buy Local" Boosted Holiday Spending at Independent Stores, January 23, 2008, by Independent Business Forum.

  Key findings:
  Independent retailers in cities with active "Buy Local" campaigns reported much larger increases in holiday sales on average than those in cities without such campaigns.

• Bellingham, WA
  Study Shows 58% of Local Citizens Are "Thinking Local First" More Often, November 2006, by Applied Research Northwest.
  Bellingham-area residents are aware of the Local First campaign and are making significant changes in their purchasing behavior because of it. Nearly 3 in 5 households attribute a behavior change to the campaign. 

  Key findings:

• 58% of Bellingham residents reported that as a result of the program they are more deliberate than they were before the program began about choosing local, independently owned businesses first.

• 92% of business participants would recommend the program to other businesses in their industry.

Economic Impact Studies (in Specific Industry Sectors)

• Bay Area Grocery Industry
  Supercenters and the Transformation of the Bay Area Grocery Industry: Issues, Trends, and Impacts, January 2004, by the Bay Area Economic Forum.

  Key findings:

• This study examines the potential impact of supercenter development in the 12-county region around San Francisco. It concludes that consumers would see a reduction in the price of groceries, at least initially, but that these savings to the region would be offset by declining wages among supermarket workers. Unionized supermarket workers, according to the study, receive on average $11.68 an hour more in wages and benefits than supercenter employees. Wal-Mart's arrival would likely lead to both job losses and wage concessions at unionized supermarkets.

• Although many cities assume superstores will provide tax benefits, the study examined 116 cities in the 12-county area and found that the presence of one or more big-box stores did not in fact correlate with higher per capita sales tax revenue except in very small towns. The study also discusses the impact of supercenters on rural versus urban markets, traffic, tourism, and retail vacancy.

• Independent Pharmacies
  
  Time to Switch Drugstores? October 2003, by Consumer Reports
  Based on a yearlong survey of more than 32,000 readers about their drugstore experiences.

  Key findings:
  Independent drugstores outranked all other pharmacies - including drugstore chains, supermarkets, mass merchandisers (e.g., Wal-Mart), and internet companies - in terms of providing personal attention, offering health services such as in-store screenings, filling prescriptions quickly, supplying hard-to-find drugs, and obtaining out-of-stock medications within 24 hours. Prices at independent pharmacies were lower than at chain pharmacies, but higher than at mass merchandisers and internet companies (excerpted from ILSR).

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