The Economic Benefits of Shopping Local

Matt Ward

When embarking on your holiday shopping, it may seem like an obvious choice to look toward large national chains, like Walmart, or browse the expansive options of product online, with retailers like Amazon. That is okay, however the small, local businesses in your area could offer greater benefits to you and your local community.

The benefits of patronizing local business go far beyond supporting mom and pop shops. These businesses enhance our local economy and catalyze our community by creating jobs. In addition, these shops are the building blocks their respective towns and cities are built on.

Shopping local keeps more money in our community than using larger regional or national retailers. According to Fundera, shopping at local businesses retains $68 out of every $100 spent in the local community compared to $43 at non-local businesses. National retailers contribute employees’ wages, taxes, and some donations with money spent in our community. Small businesses also contribute to the local economy through wages and taxes, but they are more likely to use local services, such as accounting, marketing, and manufacturing.

The dollars spent at local shops can loop through community two to four times. The American Independent Business Alliance calls it the Local Multiplier Effect.

The U.S. Chamber of Commerce states that small businesses with under 500 employees make up over 99% of the businesses in the country, and they employ nearly half of the private workforce. The numbers don’t dwindle as businesses get smaller, with 89% of employers employ 20 or fewer people. A Small Business Administration study shows that two out of three new jobs in the US are created by small businesses.

Small and local businesses also contribute 250% more donations to community based non-profit organizations and causes, compared to larger businesses contributions. That’s not to say larger companies don’t make donations, but they are less likely to donate to community-based causes. Local businesses usually do, and they sponsor community events at a higher rate as well.

Small businesses can also be better for the environment. Sourcing their materials closer to home and storing inventories nearby cuts down on carbon emissions from transporting those materials.

The benefits of shopping local aren’t strictly economical. Local businesses usually offer unique products and original items along with more personalized service. The owners of these businesses are often much more engaged with their customer base, and you are routinely able to talk to them face-to-face.

If you have ever travelled, you have probably been to the large chain stores in areas across the country. I know I have. I can say with quite a bit of certainty, if you have been to your nearest Target store, you’ve pretty much been to them all.

Local shops embrace their surroundings and use the vibrancy of their town to curate a warm, inviting, and unique environment in their space. This rings true whether you are shopping three minutes, 300 miles, or three time zones away from home. Local businesses are far from cookie cutter shops. They highlight the of culture of the place they call home. Shelves and displays are donned with items made from local resources, and themed after nearby landmarks. Some things just aren’t as common abroad as they are in your own back yard.

Whether you are holiday shopping for your loved ones or just shopping for your household, consider searching community-based businesses in your area.


Matt Ward

Communications Specialist