The intangible benefits of truly local shopping
W. Edwards Deming once said, “It is not necessary to change, survival isn’t mandatory.” Change has never been more necessary than now. With the ongoing economic challenges, it is mandatory if a community is to survive and thrive. While we often discuss the solid financial reasons for spending our personal and local government dollars locally, what gets lost in these conversations are the intangible benefits coming from supporting locally owned businesses.
The numbers tell a compelling story. Small businesses currently employ 45.9% of American workers—approximately 59 million people across 33.3 million enterprises. More importantly, research by the American Independent Business Alliance reveals that 48% of each purchase at local independent businesses recirculates locally, compared to less than 14% of purchases at chain stores. This dramatic difference in economic impact extends far beyond mere dollars and cents. For those new to this discussion, hyper-local spending means supporting businesses that are locally owned and operated, where decision-making happens in your community rather than in distant corporate boardrooms.
First, spending local creates a powerful multiplier effect that strengthens your community’s economic foundation. Studies suggest that every dollar spent at local stores contributes three times the jobs, income effects, and tax benefits to the local economy compared to chain alternatives. This happens because locally owned businesses tend to hire local people, utilize local services, and source from local suppliers whenever possible.
Beyond employment, locally owned businesses demonstrate deeper community investment. While all businesses pay local taxes, locally owned enterprises are far more likely to support local causes and nonprofits. This support manifests in multiple ways: serving on local boards, volunteering time, providing in-kind donations, and demonstrating genuine community pride. When business owners live where they work, they have a vested interest in the community’s long-term success rather than quarterly profit margins determined elsewhere.
Secondly, shopping local provides access to genuine expertise you simply cannot find online or in big-box stores. Local business owners become specialists in their field because their reputation depends on it. Whether you need advice on selecting the right tool, finding the perfect fit, or understanding complex products, local retailers offer personalized service that creates real value. This expertise often leads to discovering unique, locally made items you would never encounter while shopping online or out of town.
The information exchange that occurs during these interactions addresses a growing problem in our hyper-connected yet fragmented world. While information has never been more available, many residents in local communities suffer from information starvation—not knowing where to find reliable, relevant local knowledge. Shopping locally creates natural opportunities for community members to share vital information with each other.
Thirdly, when you shop at locally owned businesses, you cast a powerful vote for entrepreneurship and the American dream. Small businesses contributed 55% of total net job creation, demonstrating their crucial role in economic growth. Dollars spent locally represent investment in enhanced local entrepreneurship, which generates sustainable economic development. Supporting existing local businesses helps ensure these new entrepreneurs have thriving examples to follow and established networks to tap into.
Fourth, hyper-local
shopping creates irreplaceable social connections. When you shop local, you encounter neighbors, old friends, and potential new relationships. The COVID-19 pandemic taught us the immense value of human interaction and
community connection—something entirely absent from online shopping
experiences. This social capital contributes to the hustle and bustle that makes downtowns and Main Streets vibrant community centers. These interactions strengthen the social fabric that holds communities together during challenging times.
Communities with a strong local business bases show greater resilience during economic downturns. Small businesses represent 43.5% of GDP and pay 39% of all private sector payroll, making them essential for economic stability. When communities invest in local businesses, they build long-term sustainability and increased self-reliance—qualities that ensure survival regardless of external economic conditions. The future of small and medium-sized towns relies on locally owned business success. When we support them, we build our own Main Streets while sending less money to Wall Street. Local governments, communities, and residents can control this outcome by seeking every opportunity to support and shop hyper-locally. The choice is ours, and the stakes have never been higher.
John A. Newby is the author of the “Building Main Street, Not Wall Street” column dedicated to helping local communities, government and business combine synergies allowing them to thrive in a world where truly-local is being lost to Amazon and Wall Street chains. His email is john@truly-local.org