When you shop at a mega-retailer chain store or an online retailer, most of your dollars leave the local economy. You may save a few cents, but the loss to our hometowns results in local unemployment, higher taxes, and reduced services. By supporting locally-owned, independent businesses, communities keep their dollars working for them as they enrich the local economy, increase the diversity of available products, provide better service and improve the quality of life for all of us.
In the late summer of 2005, Kepler’s, a fifty-year-old independent bookstore in Menlo Park, California, abruptly shut down. Owner Clark Kepler explained that bookstore chains and Amazon.com had displaced so much of the store’s sales that he could no longer pay the bills. But before Kepler could file for bankruptcy, the business was swept up in an outpouring of community grief. Hundreds of local residents rallied outside the shuttered store, which was soon covered in forlorn love letters from customers describing how the bookstore had been the center of community life and what a loss it was.
“Can’t the store be saved? You’re one of the main reasons I’m here.” Many offered money: “How about a monthly donation? I can do $50/mo… Give us a Web site so we can all support you. Let us help. Please.” Soon someone set up SaveKeplers.com and the pledges poured in.
Five weeks after it had closed, Kepler’s was back, saved by a group of local investors who vowed to return the business to sound financial footing, and numerous small donations from residents. One of the more remarkable aspects of this community effort to save a bookstore is that many of the people who rallied – who so adored this business that they could not conceive of their town without it and were willing to give their time and even their money to save it – confessed in interviews with reporters covering the story that they, too, had been buying more and more books online and at Target and Borders.
They loved the store for its many author events and for the joy of browsing and meeting neighbors, and for the sense of community it fostered, but that devotion did not always translate into regular patronage. The store’s near closure brought into stark relief just what was at stake.
Across the country, people are coming to similar realizations about the value of locally owned, independent businesses – the beloved bookstores, century-old family hardware stores, local grocers, and funky neighborhood record stores – as well as the high cost to communities and local economies of the corporate retailers that have grown to dominate so much of our landscape… Independent Business Alliances have sprung up in more than three dozen communities since the late 1990s and, through creative marketing and educational campaigns, are making “locally owned” something residents are increasingly seeking and supporting… This explosion of activity may well herald the beginning of a sea change in our priorities as a society.
-The above excerpted from Big-Box Swindle by Stacey Mitchell (Beacon Press 2006)
In the spring of 2007, Clark Kepler, along with other independent business owners, formed an independent business alliance called Hometown Peninsula www.hometownpeninsula.org. Its mission is to keep peninsula hometowns alive and thriving by encouraging residents to buy from locally owned, independent businesses. Membership to Hometown Peninsula is open to local independent businesses that have a primary place of business on the peninsula and whose owners have a full-decision-making authority for their business. Individuals who support the goals of Hometown Peninsula may become supporting members.
Trading independent retailers for big-box chains weakens the local economy. This is because local stores recycle a much larger share of their sales revenue back into the local economy, while chains siphon most of the dollars spent at their stores out of the community, funneling them back to corporate headquarters or to distant suppliers. The added economic benefit of local stores has been dubbed the “local premium”. Several studies have quantified it. From Andersonville IL, Austin TX, Boulder CO and San Francisco, economic impact studies show that locally owned stores generate greater benefits for the local economy than do national chains. The Andersonville Study, for instance, shows that for every $100 a consumer spends: Local businesses give back $68 to the local economy. Chain stores only give back $43.
The Local Premium impacts:
· Local payrolls, as locally owned businesses spend a larger share of their revenue on local labor because they carry out all management functions on-site, rather than at corporate headquarters.
· Procurement, as local retailers spend more than twice as much buying goods and services from other local businesses. They bank locally; hire local accountants, attorneys, designers, and other professionals; advertise in local media; and source inventory from local firms.
· Profits; because their owners live in the area, a larger portion of the local retailers’ profits stay within the local economy.
· Charitable giving, as local retailers donate more on average to local charities and community organizations than the chains do.
Adding dollars circulating in the local economy translates into a larger number and wider variety of available jobs. The implications of the local premium for how cities approach economic development are significant. Not only do big-box stores eliminate more retail jobs than they create, but they reduce local economic activity and job creation in other sectors. Conversely, expanding local businesses generates substantially greater economic benefits.
By supporting locally-owned, independent businesses, communities keep their dollars working for them as they enrich the local economy, increase the diversity of available products, provide better service and improve the quality of life for all of us. During this recession, now more than ever, if you understand this issue and care about your community you should PUT YOUR MONEY WHERE YOUR HOUSE IS!
Check out these sites to learn more about Hometown Peninsula and its members as well as other communities across the nation that are united to maintain economically vibrant independent business communities: