Local businesses benefit economy, study says
A study conducted by national research firm Civic Economics indicates that independent retailers return 52% of their revenue to the local economy, compared with 14% by national chains. The conclusions were based on data collected in 2011 in Salt Lake Valley, Utah, where 15 retailers and seven restaurants, all independent and locally owned, participated in the survey.
For comparison purposes, Civic Economics analyzed annual reports for four major national chains: Barnes & Noble, Home Depot, Office Max and Target. In addition, researchers analyzed reports for three national restaurant chains Darden, McDonald's and P.F. Chang's.
The study was promoted at a Salt Lake City press conference on Aug. 15 promoting local businesses. As reported in the Salt Lake Tribune, the event got a boost from former President Bill Clinton, whose visiting entourage ordered take-out food from a local restaurant named the Red Iguana.
According to Civic Economics, chain stores and restaurants extract locally generated revenue from the community with each nightly bank transaction, while independents create a cycle of local spending.
The extra dollars in local communities produce more jobs, extra tax revenue, more investment in commercial and residential districts, and enhanced support for local nonprofits, the report said.
Daniel Houston, a partner at Civic Economics, told the newspaper that similar studies in Chicago; San Francisco; New Orleans; Phoenix; and Grand Rapids, Mich., by the national research group shows that shopping locally can keep at least three times more revenue in local economies.