Shopping Local vs. Shopping Locally

The Ethics of Saving Money

Do you make a point of shopping locally? What about shopping local? While they might sound same, there’s an important distinction — at least in my mind. When I say “shop locally, ” I’m referring to the practice of buying from stores in your community. But when I say “shop local, ” I’m talking about buying from locally-owned small businesses.

While many people take great pride in shopping locally (vs. buying online from Amazon or some other e-tailer), they miss the point by hitting up Wal-Mart or another big box retailer. Sure, these places employ local citizens and collect local sales taxes, but a significant portion of there revenue goes elsewhere.

This reality was underscored in a study from Maine that I recently ran across. The study, which focuses on a particular section of Midcoast Maine, compares the economic impact of shopping at locally-owned businesses vs. major chains. Yes, it dates back to 2003, but the findings are still quite interesting.

In short, the study’s authors found that for every dollar spent at a locally-owned establishment, nearly 45% of that revenue stayed in the local community with another 9% being spent elsewhere in the state. These expenditures included employee wages/benefits, inventory, supplies, and services from other local local businesses, profits accrued to the local owners, state and local taxes, and charitable contributions.

In contrast, for every dollar spent at a chain store, only 14% of the revenue stayed in the local community, mostly in the form of payroll. The balance of that money flows to out-of-state suppliers, or back to the parent corporation.

Based on these numbers, three times as much money stays in your community when shopping at a locally-owned business vs. shopping at a chain store.

Sadly, in many places, you just don’t have that many options when it comes to patronizing locally-owned businesses. Around here, it’s easy to find a locally-owned restaurant or coffee shop, but for groceries, electronics, etc. most local retailers have been pushed out by their big box brethren.

I still make a point of buying from our local hardware store whenever possible, and I frequent a few of the local businesses in our downtown shopping area, but it’s tough to “buy local” when there are just so few options left.

And when it comes to shopping at a big box vs. shopping online? I let prices and convenience dictate my choices. Yes, there’s a marginal local benefit to shopping at Best Buy vs. Amazon, but it’s not enough to offset the better prices and vastly broader selection.

What about you? Do you make a point of shopping local when you can?

20 Responses to “Shopping Local vs. Shopping Locally”

  1. Anonymous

    We’re a group of volunteers and opening a new scheme in our community.

    Your web site provided us with valuable information to work on.
    You have done a formidable job and our whole community will
    be thankful to you.

  2. Anonymous

    You made some really good points there. I checked on the web to learn more about the issue and found most individuals will go along with your views
    on this site.

  3. Anonymous

    Greetings! I’ve been following your web site for some
    time now and finally got the courage to go ahead and give you a shout out from Huffman Texas!
    Just wanted to say keep up the good job!

  4. Anonymous

    Excellent post. I was checking continuously this blog and I’m impressed!
    Extremely helpful info specifically the last part 🙂 I care for such information a lot.
    I was looking for this certain information for a long time.
    Thank you and good luck.

  5. Anonymous

    It all depends on the individual and how much
    time they are willing to put in. If you can, choose a short catchy keyword for your domain,
    one people will remember and would naturally type into a search engine or browser to find what they’re looking for on the web.
    if you are looking for specific items when they are posted you get emailed an alert.

  6. Anonymous

    Excellent blog here! Also your website loads up fast! What web host are you using?
    Can I get your affiliate link to your host? I wish my web site loaded up as quickly
    as yours lol

  7. Anonymous

    Its like you read my mind! You seem to know a lot about this, like you wrote the book in it or something.
    I think that you could do with some pics to drive the message home a bit, but instead of that, this is magnificent blog.
    A fantastic read. I will definitely be back.

  8. Anonymous

    Fine way of telling, and pleasant post to obtain facts concerning my presentation
    subject, which i am going to convey in institution
    of higher education.

  9. Anonymous

    I shop mostly locally- the things that I purchase online are mostly things that I just cannot get without a 2 hr drive. That being said, a large % of my shopping is at large chain stores, mainly because that is what I have easiest access to and familiarity with.

    There is a independent supermarket locally at which I shop, with two stores. While most of the prices are competative, there are just some items that cost 25-50% more that I buy elsewhere (items that I use frequently). The store is an ESOP (employee stock ownership plan) and stocks some local independent items, like honey from less than 2 hrs away.

  10. Anonymous

    I shop online through rebate portals like bigcrumbs, fat wallet, and ebates. Many times, I get free shipping, pay no tax (although this will change eventually), and get online discounts not available at physical stores.

    To balance this out, I eat at locally-owned restaurants so I can put money back in the community.

  11. Anonymous

    I agree with your important distinction between shopping local & locally. I try to avoid big box stores as much as possible–they are too tempting. On food, I try to shop at farmers markets as much as possible. For other items, I do shop online. This allows me to buy ONLY the item I need and not be subject to other tempting impulse buys!

  12. Anonymous

    We try to shop local vs big box or online but sad to say in these hard times money will out. I would rathr pay online for the item if it is quite a bit less expensive. I look at the local business person and if they are touted in the newspaper as bringing in so much money than I know they can get along without my business.

  13. Anonymous

    I’ll buy online whenever it’s a better deal, which is usually. Exceptions are food and often clothing (which I like to see and try on). Shipping is usually free (yay Amazon Prime), my former coworkers at UPS get the work delivering what I bought, and I save time and gas.

    I live in Colorado, but I also don’t buy Colorado-grown limes or avocados or dates or, in winter, Colorado-grown lettuce or tomatoes. I do most always buy Colorado-brewed beers, and buy them “local”.

  14. Anonymous

    Out of town shops have done a good job of convincing us all that local shops are expensive, but the evidence just isnâ??t there to back this up. If you add in travel costs, fees to transport larger items home and your time, the overall cost is often much higher.

  15. JimL: Excellent point, though it’s worth pointing out that ownership of those companies is distributed around the world b/c most are publicly-traded.

    BG: It’s probably not 0% because they have to pay for delivery (local UPS employees, gas in the delivery vehicles, etc.) but your point is well taken. For me, however, the other advantages (primarily cost and selection) outweigh the 14%.

  16. Anonymous

    What about shopping at the big box store when the headquarters are in your city/state. If I shop at Target or Best Buy which are both located in the Twin Cities where I live the percent of my dollar staying in the state is quite high even though they are big box stores. I feel that in shopping these stores in my situation is still a version of shopping local in that it keeps the money here in Minnesota. Granted, I still like to support the small locally owned businesses in my city too. Just some food for thought.

  17. Anonymous

    I love the idea of buying local… I wish the prices were better but the concept being good for the local economy is hard to argue.

    The one area which I think is arguably good for the local economy which I always do local is hit the 2nd hand items at Craigslist.

    In a way this is an underground economy but it sure does keep the money flowing in a very local way. My wife and I are constantly upgrading our baby items from Craigslist as our little guy grows up and simultaneously selling off his old stuff on Craigslist.

Leave a Reply