Progressive Grocer Independent

OCT 2016

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24 | Progressive Grocer Independent | Ocober 2016 Maximizing Local Business purchases at chain stores. e Institute for Local Self-Re- liance also conducted a study on the multiplier effect of how much of a dol- lar spent at a local independent store is re-spent in the surrounding area as payroll, goods/services purchased from area businesses, profits spent locally from area business owners, and donations to area charities. e results were nearly identical to the Civic Economics study: For each $100 spent at local retailers, $45 was generated for secondary local spending, compared with only $14 for money spent at a big-box chain. When factoring in the additional benefit of buying a locally produced item from a local indepen- dent retailer, the impact to the overall community can only be greater. Double Impact To find out exactly what that impact is, Santa Rosa, Calif.-based Oliver's Market recently updated a report it had originally conducted in partnership with Sonoma State Uni- versity. e study, "Going Local as a Retailer: Oliver's Market 2016," found that when a con- sumer buys locally produced product — more on the definition of "locally produced" later — from Oliver's Market, an inde- pendent with four stores in Sonoma County, the financial benefit to Sonoma County is 2.5 times greater than when the customer buys a national brand from a chain store. In addition, when a con- sumer buys locally produced product from Oliver's, the local taxes generated by that sale are almost three times greater than purchasing a national brand from a chain store, and for every $1 Oliver's spends on payroll, the company's local focus supports another 81 cents in payroll spending at the Sonoma County producers sup- ported by the company. "We believe as a locally owned and operated business supporting other local businesses that we contribute a larger amount of dollars to our com- munity, but having this measurement and assessment makes the benefits more tangible, both to us and to our customers," says Tom Scott, CEO of Oliver's Market, who retired from the business this past Sept. 1. When advertising this economic benefit, the American Independent Business Alliance suggests leaving the actual dollar amounts and percent- ages out of your message, and instead using messaging like "independent retailers return more than three times as much money per dollar of sales than chain competitors." Local Defined e push for local also means buying locally produced items. But how is "lo- cally produced" defined? It depends on the retailer. For some, like Lake Mills Market, it means the state in which the store is located, in this case Wisconsin. Others, like Farmview Market, have varying degrees of local, distinguish- ing products as regional, or sourced in states that border its own state of Before you buy, consider... How much of your $100 purchase stays in your community when spent at: an independent local store an in-town chain outlet a remote online store (if delivery driver resides locally) Local Economic Return of Indies vs. Chains Chain Retailers Independents Local Recirculation of Revenue: 13.6% Local Recirculation of Revenue: 48% Profit & Labor 25.2% Procurement for for Procurement for Internal Use 5.7% al Internal Use 5.7% .7% Internal Use 5.7% Procurement for nt Procurement for for Resale 14.3% 4.3% Resale 14.3% Charitable Giving 3% "We believe as a locally owned and operated business supporting other local businesses that we contribute a larger amount of dollars to our community." —Tom Scott, Oliver's Market Compiled results from nine studies by Civic Economics, 2012: www.civiceconomics.com Graph by American Independent Business Alliance: AMIBA.net $1 $14 $48 Source: American Independent Business Alliance

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