The Results of our Indie Impact Study are in, and the bottom line is:
Shifting just 10% of spending to local businesses would keep an additional $475 million in the regional economy each year.
The “Indie Impact Study Series 2013-14: A National Survey” from Civic Economics details the amount of revenue returned to the local economy by independent, locally-owned businesses.
In partnership with the American Booksellers Association and research firm Civic Economics, Re>Think Local completed its study of Hudson Valley businesses, comparing the economic multiplier effect of spending at local independents with that of major corporate chains. These survey results help make the case to Hudson Valley consumers that their dollars do more when spent at local independents.
Key highlights of the study:
- Hudson Valley retailers keep more than 4x more money circulating in the local economy than corporate chains: 58.2% vs. 13.6%.
- Hudson Valley restaurants keep more than 2.5x more money here: 77.7% vs. 30.4%.
- A market shift of just 10% from chains to independents would retain an additional $475 million in the regional economy every year.
For this study, Re>Think Local collected in-depth financial surveys from two dozen independent, locally-owned retail businesses and restaurants in Dutchess, Orange, and Ulster Counties.
Each business was asked about its business practices, focusing on the distribution of revenue that recirculates in the regional economy through certain categories of expenditures: profits, wages, procurement, and charitable giving.
Since 2002 Civic Economics has conducted a number of such studies comparing the economic impacts of independent, locally-owned businesses with that of their chain competitors.
Without fail, the findings give further proof that independents bring substantial benefits to their local economies when compared to their chain competitors. While chain stores and restaurants extract locally generated revenues from the community with each nightly bank transaction, independents are creating a virtuous cycle of local spending.
The extra dollars in the local economy produce more jobs for residents, extra tax revenues for local governments, more investment in commercial and residential districts, and enhanced support for local nonprofits.
The 10% Shift
The three-county area that Re>Think Local focused on produces annual retail store sales across all retail lines of goods (excluding automotive sales) of roughly $9.2 billion and restaurant sales of $940 million, according to the 2007 Economic Census.
Assuming this survey provides a representative sample of area independent retailers, a market shift of just 10 percent from chains to independents would retain an additional $475 million in the regional economy every year.
The results will be featured in a public awareness and promotional campaign as part of our new program launching later this year: GO LOCAL Hudson Valley.
Civic Economics based the study on analysis of the in-depth surveys and, for comparison purposes, annual reports for major national retail chain stores — Barnes & Noble, Home Depot, Office Max, and Target) and restaurants — Darden (Red Lobster, Olive Garden, etc.), McDonald’s, and PF Chang’s.
Co-sponsors of the study include the American Booksellers Association (ABA) and local ABA members Half Moon Books in Kingston (Ulster County) and Oblong Books and Music in Rhinebeck (Dutchess County).