I haven’t taken the time to look into the methodology of the study in any great detail, but, according to our friends at BALLE, the folks at the Maine Center for Economic Policy have completed a study showing that dollars spent at locally-owned businesses yield almost twice as much in the way of local economic impact as those spent with national chains in the same geographic region. The following clip comes from the BALLE release.
A new study produced by the Maine Center for Economic Policy (MECEP) has found that, on a dollar-for-dollar basis, the local economic impact of independently owned businesses in Portland is significantly greater than that of national chains. MECEP found that every $100 spent at locally owned businesses contributes an additional $58 to the local economy. By comparison, $100 spent at a representative national chain store in Portland yields just $33 in local economic impact.“Jobs are the most pressing issue on everyone’s mind. Because locally owned businesses keep their profits in the community and are more likely to purchase goods and services from local sources, consumer spending at these businesses has a multiplier effect that increases local economic activity and creates jobs,” said Garrett Martin, Executive Director of MECEP and co-author of the study.
The study finds that changes in consumer spending choices can add up to sizeable economic benefits for the region. Based on 2007 retail sales figures, shifting just 10% of consumer spending in Cumberland County from national chains to locally owned businesses would result in an additional $127 million in economic activity, supporting 874 new jobs and generating over $35 million in wages.
MECEP relied on financial data provided by 28 independent businesses in Portland and information obtained from corporate filings for a representative national chain (Dollar Tree) to model local economic impact. Previous studies of the economic impacts of local businesses in other locales have produced similar findings.
The study was commissioned by the Portland Independent Business & Community Alliance (PIBCA), the nonprofit organization behind Portland’s “Buy Local” campaign. “Until now, we have had to rely on studies from other states to make the case that choosing locally owned, independent businesses generates significant benefits for our region’s economy. This study provides compelling data that is specific to Greater Portland,” said Susan Tran, president of PIBCA…
Speaking of “buy local” campaigns, I’m sure you all noticed that Linette and have taken the last few years off from our annual Buy Indie in Ypsi initiative. This year, we had as an excuse the fact that our son was due in early December. I suspect the reason we stopped doing it, however, had more to do with our burning out. It took a lot of work to pull it together and fund it each year, and, at the same time, it seemed to us that the idea of buying local had gone mainstream to the point where we weren’t really needed any more… I mean, American Express spent millions over the past two years on national “buy local” ad campaigns… Granted, they were just asking for people to patronize their locally owned stores for one measly day a year, but I think it still marks a huge shift from where we were in 2007, when the concept was still somewhat foreign. Anyway, we stopped distributing our “Shop Ypsi for the Holidays” materials a couple of years ago, and I’ve been meaning to bring it up for discussion here ever since. So, if you have thoughts on how useful the initiative was, whether it would make sense to revive it next year, or how we might be able to do an even better job of it, please leave a comment.