Why Locally Owned Shops Deserve Our Business the Rest of the Year, Too

Locavesting Staff | November 26, 2017


Americans are voting with their dollars. Sandwiched between the frenzy-inducing duo of Black Friday and Cyber Monday, Small Business Saturday has quietly become a force.

Last year on Small Business Saturday, an estimated 112 million Americans spent a combined $15.4 billion at independent neighborhood retailers and restaurants, up 13% from 2015.

The figures are not in yet for this year, but neighborhoods everywhere were filled with locals strolling and shopping on Saturday (a much more pleasant prospect than the lines and brawls that have come to characterize Black Friday).

The sales are not huge in the scheme of things—Americans spent more than $5 trillion in 2016 across all categories of retail. And this year, online sales alone on Black Friday topped $5 billion. But as malls, department stores and chain retailers become online roadkill—more than 19 chains have filed for bankruptcy in 2017—Main Street merchants are seeing opportunity.

Glass Half Full

In a national survey of more than 850 independent retailers by Advocates for Independent Business, two-thirds report that, despite their smaller size, they are responding to the profound shifts in the retail industry as well as or better than competing national chains are. They credit their resilience to their deep expertise, personalized service, community involvement and rewarding in-store experience. Those factors have helped fuel a resurgence of independent sellers of books, toys and records.

That said, indie retailers acknowledge the long shadow of Amazon. A full 90% of respondents say the online behemoth is having a negative impact on their business. And they worry that, even if their stores are doing well, more vacancies created by failing chains and department stores could have a snowball effect, lessening foot traffic to shopping areas and sending more consumers online.

So, while a holiday dedicated to small businesses is nice, local retailers need our year-round support.

Here are just some of the benefits of locally-owned businesses (with a hat tip to the Institute for Local Self Reliance, which tracks these studies):

They support your kids’ schools and your garbage collection

Small business owners don’t have hordes of tax lawyers setting up offshore bank accounts or exploiting loopholes, so they pay taxes. One study found that, while a county earns just $7.11 in property taxes per acre on a typical big-box retail store, it earns $287.55 per acre on a mixed-use, mid-rise Main Street-style business district. And of course, many online retailers skimp on or skirt taxes altogether. Amazon has paid an average of just 13% for federal, state, local and foreign taxes from 2007 to 2015, according to the New York Times.

They keep money circulating locally

Local businesses donate to local causes and often buy goods and services from other local businesses, in contrast to the centrally managed procurement of many big box stores and chains. For these and other reasons, a dollar spent at a locally-owned business generates on average three times the local economic activity than a dollar spent at a non-local store. Studies also link the presence of a mix of locally-owned businesses with job creation and greater economic vitality.

They boost civic engagement

Local business owners are often civic leaders and engaged in their communities. And their presence has been shown to increase voter turnout, interest and knowledge of politics and current events, local newspaper readership, participation in associations, and engagement in protest activity, according to one study.

They give our communities soul

Most tangibly, local businesses lend neighborhoods their distinct personalities, provide a place for social interactions, and generally make their communities more desirable places to live. (There is dark irony in the fact that Amazon, which has put the squeeze on small businesses everywhere, cites community and quality of life among the criteria for its tax-subsidized second headquarters).

So if you missed Small Business Saturday, don’t worry. There are 364 other shopping days in the year.

UPDATE: American Express reports that 108 million shoppers spent $12.9 billion at independently owned businesses on this year’s Small Business Saturday, a slight dip from 2016.


Tags: , , ,