Study Finds Shopping Local Generates Almost Four Times the Economic Benefit

By Dave Grogan on Thursday, Sep 6, 2012

A new study conducted in Salt Lake City, Utah, has found that indies generate almost four times as much economic benefit for the surrounding region as do chains. The study, “Indie Impact Study Series: A National Comparative Survey With the American Booksellers Association: Salt Lake City, Utah,” stressed that a market shift of just 10 percent from chains to independents would keep an additional $362 million in the regional economy every year. The study was conducted by the research firm Civic Economics and was sponsored by Local First Utah. The study is part of the Indie Impact Study Series, a nationwide research project, being conducted by Civic Economics in partnership with the American Booksellers Association. 

“Other studies across the country, from Austin to San Francisco to Chicago have been very helpful to all of us in our efforts to further the local movement,” said Betsy Burton, co-chair of Local First Utah, co-owner of the The King’s English Bookshop, and an ABA Board member. “But having the actual figures from our home city is compelling to the public and to local government officials in a whole different way.”

Burton noted that the study’s findings mean that “right here in Salt Lake ... we can say with pride, a dollar spent in a local business means a huge amount to all of us in economic terms.”

She also noted that the study has spurred media interest and has “already raised the profile of local businesses in a significant way. So has the idea that shifting a mere 10 percent of one’s shopping to local can add nearly half a billion dollars to the city’s economy.”

Local First Utah and The King’s English collected surveys from a total of 22 independent businesses, including both retail and restaurant establishments in the community. The businesses provided information on revenue expended in five categories: profits paid out to local owners; wages paid to local workers; procurement of goods services for internal use; procurement of local goods for resale; and charitable giving within the community. Civic Economics then analyzed the data and compared it with four chain retail stores and three national restaurant chains.

The findings were telling. Independent retailers returned an average of 52 percent of their revenue to the local economy, while the chain retailers recirculated only 13.6 percent. Local restaurants returned some 78.6 percent of revenue, while chain restaurants returned 30.6 percent.

Indie retailers spent 27.1 percent locally on labor, 17.4 percent locally on procurement for resale, 3.1 percent on charitable giving, and 4.4 percent on procurement for internal use.