In the smallest towns, bustling cities, and everything in between, people are feeling the loss of a sense of community and local character. Meanwhile, national chains and online mega-stores continue gaining market and pushing independent businesses to the margins in many sectors. This trend is considered symptomatic of our loss of community orientation, but could it also be a primary cause? And what are the economic costs to our communities as absentee-owned corporations displace locally-owned businesses?
Of course, we usually choose to do business where we perceive the best value for our time and money. But in an age where we’re bombarded with thousands of corporate advertisements daily, perceptions may differ widely from reality. The unrelenting emphasis on cheapness above all other values leads many people to overlook the values independent businesses provide us, both personally and in our communities.
When we’re asked to name our favorite restaurant, cafe, or shop, it’s invariably a unique local business. Those businesses define our sense of place, but we often forget their survival depends on our patronage. Local owners, typically having invested much of their life savings in their businesses, have a natural interest in the community’s long-term health. Community-based businesses are essential to charitable endeavors; their owners frequently serve on local boards and support numerous causes. Yes, some chains give back to towns in which they locate, and not all local businesses are exemplary models. However, the overall impacts are clear: locally-owned businesses play a key role in our community that chains rarely do.
Independent local businesses employ an array of supporting services by “buying locally” themselves. They hire architects, designers, cabinet shops, sign makers and contractors for construction. Local accountants, insurance brokers, computer consultants, attorneys, advertising agencies help run it. Local retailers and distributors also carry a higher percentage of locally-produced goods than chains, meaning more jobs for local producers.
In contrast, a new chain store typically is a clone of other units, eliminates the need for local planning, and uses a minimum of local goods and services. A company-owned store’s profits promptly are exported to corporate headquarters. That’s simply good, efficient business for them, but not so good for our communities.
Dollars spent at community-based merchants create a multiplier in the local economy, meaning that from each dollar spent at a local independent merchant, 2 to 3.5 recirculates in the local economy compared to a dollar spent at chain-owned businesses. This “local multiplier effect” means shifting more local purchasing to independent businesses is a key tool for creating more local jobs.
Despite the dismal trends, a counterforce is building. Dozens of communities have launched Independent Business Alliances, such as Think Local Amarillo — coalitions of local businesses, non-profits and concerned citizens uniting to support local entrepreneurs and prevent the loss of community-rooted businesses. These alliances typically facilitate group purchasing, joint marketing, and ongoing public education campaigns. They’ve succeeded in a diverse range of communities and are driving major shifts in local culture and spending! For long-term progress, a conceptual change is necessary and each time we spend a dollar, we would do well to weigh the full value of our choices, not merely today, but for the future of our home towns.