New Study Shows 10% Shift to Indies Makes Significant Economic Impact

September 25, 2008

On September 23, Local First of Grand Rapids, Michigan, unveiled the results of the new economic study "Local Works: Examining the Impact of Local Business on the West Michigan Economy." The study revealed that a modest change in consumer behavior -- a mere 10 percent shift in market share to independent businesses from chain stores -- would result in 1,600 new jobs, $53 million in wages, and a $137 million economic impact to the area. "Local Works" was funded by the Steelcase Foundation and conducted by Civic Economics.

"We are looking forward to sharing the results with local policy makers and our local community," said Elissa Sangalli Hillary, Local First executive director. "So often, individuals feel overwhelmed and unable to make a difference. The study shows that by choosing to support locally owned businesses, individuals can help to create and retain jobs in [their] community."

For the study, Civic Economics analyzed the performance and economic impact of independent businesses in Kent County, Michigan, and identified opportunities for economic enhancement based on that analysis. Data was collected and analyzed for businesses in four lines of goods: pharmacies, grocery stores, full-service restaurants, and banks.

Hillary noted that "Local Works" confirmed the results of similar studies across the country, including Civic Economics studies conducted in Chicago, San Francisco, and Austin, Texas. She added, however, that, while these earlier studies generated great momentum for independent businesses, some policymakers have dismissed them unfairly based on the theory that Austin, Chicago, and San Francisco are somehow atypical communities. No one will be able to dismiss "Local Works" on that premise, she said.

According to the study, "the 1,600 additional jobs created by a 10 percent shift in market share from chains to locals "would have been enough to increase employment by one-half of one percent in 2007. Output for the county could be increased by $137 million as well, and this benefit would be spread among many industries, not only the retail sector."

Additionally, "Local Works" concludes: "The magnitude of these impacts is such that, under ordinary circumstances, economic development organizations and public agencies would rally to the cause, actively recruiting and incentivizing any firm promising such an impact. As it happens, consumers can themselves create these impacts with only a modest shift in their habits and behavior." --David Grogan

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