Why Buy Local (2019)

The Sun Prairie Chamber of Commerce, Dane Buy Local, the Sun Prairie Business Improvement District and, of course, locally owned businesses have preached for years about the benefits of shopping locally.

According to the American Independent Business Alliance (AMIBA), the Institute for Local Self-Reliance conducted a study of the local multiplier effect in several small Maine communities in 2003.

The study examined how much of a dollar spent at a local independent store is re-spent in the local area as payroll, goods/services purchased from area businesses, profits spent locally by owners, and as donations to area charities. The study found each $100 spent at local independents generated $45 of secondary local spending, compared to $14 for a big-box chain — nearly identical to later results across many Civic Economics studies.

Civic Economics, a private research firm, has been the source of much confusion and been misrepresented extensively, to the detriment of many organizations.

The study of Chicago’s Andersonville neighborhood found a total economic impact (direct, indirect and induced) of 68 cents for each dollar spent at 10 local independents, compared to 43 cents projected for their chain competitors.

However, the projection of indirect and induced impacts does not mean 68 cents of each dollar spent at a local independent “stays” in the local economy — an inaccurate claim that has been spread widely. It means 68 cents of additional local economic return ultimately is generated after additional spending cycles.

But remember, on average, 48 percent of each purchase at local independent businesses was recirculated locally, compared to less than 14 percent of purchases at chain stores.

Still think the benefits of shopping locally and being active with your local chamber of commerce don’t impact your local economy?

A national study by The Schapiro Group, an Atlanta-based market research firm, revealed a number of important findings about how consumers and business owners perceive the local chamber of commerce and the businesses that are their members. Consider:

• When consumers know a business is a member of the local chamber, they are 44% more likely to think favorably about it.

• When consumers are aware that a small business is a member of the chamber, there is a 63% increase in the likelihood that consumers will patronize the business in the future.

• Perhaps most notably, when business decision-makers believe a business is a chamber member, they are 37% more likely to think favorably of the business and 51% more likely to be highly aware of it, 58% more likely to think positively of its local reputation, and 59% more likely to buy goods and services from it. Those are some fairly significant statistics. When taken with the local multiplier effect and the total economic impact of spending money with local retailers, it becomes even more convincing that local consumers should spend their money locally.

With fewer shopping days until Christmas because of where Thanksgiving falls on the calendar this year, Sun Prairie consumers need to keep those statistics in mind when making their holiday shopping decisions.

This year, consumers can make every local merchant’s holidays merry with gifts from Sun Prairie.

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