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The Economic Benefits of Shopping Local

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


This memorandum expresses the views of the author as of the date indicated and such views are subject to change without notice. Community First Bank, HFG Trust, and HFG Advisors have no duty or obligation to update the information contained herein. Further, Community First Bank, HFG Trust, and HFG Advisors make no representation, and it should not be assumed that past investment performance is an indication of future results. Moreover, wherever there is potential profit there is possibility of loss. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as an offering of advisory services, banking services, or an offer to sell or solicit and securities or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources. Community First Bank, HFG Trust, and HFG Advisors believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. This memorandum, included the information contained herein, may not be copied, reproduced, republished, or posted in any form without the prior written consent of Community First Bank and/or HFG Trust and/or HFG Advisors. HFG Advisors, Inc, is a wholly owned subsidiary of HFG Trust, LLC. HFG Trust, LLC is a Washington state-registered Trust company and wholly owned subsidiary of Community First Bank.