Shopping Locally
What It Means and Why It’s Important
By Tim Holmes
There are common misunderstandings of what it means to shop locally. Shopping locally is a term commonly used, but rarely explained.
In a recent discussion, one person noted she shopped locally at Whole Foods, Borders, Peet’s, and Pasta Pomodoro. Certainly this person never left her local area, but to equate any of these businesses with “shopping locally” is an error of the first degree. None of these businesses contributes much more than a small number of low-wage jobs and a minor amount of sales tax revenue to the local economy.
“Shopping locally,” in the sense that will have an impact on your town or city, means keeping the money you spend in your local economic community. So, how do you do this?
If you purchase something from a company not owned by someone within your economic area, less than 15 cents of every dollar spent stays within the local economy. The majority of the money leaves the area, returning to the home region of the company. Alternatively, spending your money in a locally-owned business keeps over three times that amount—about 45% of every dollar—in your local economic community. (“Economic Impact Analysis: A Case Study” published by Livable City)
The owner of a locally-owned company lives within your economic area and will use the revenue and profits from that business locally to purchase goods for resale, buy a home or a car, eat out, buy coffee, launder clothes, see a movie, and, of course, pay taxes. Local businesses donate more dollar per revenue, keep wages higher, provide better variety, increase property values, and more.
None of the businesses mentioned at the beginning are owned by someone living in San Leandro, or in Alameda County, or even in the East Bay. And, of course, any publicly-owned companies aren’t local as their owners are wherever the shareholders live. The only thing local about these businesses is that they have a local retail outlet in which to take our money.
In the end, the closer to home your money stays, the better for your community. For a San Leandran, that order would be San Leandro, then Alameda County, then California, then the United States. I state this order because sometimes it’s just not possible to purchase something locally. Buying a car within the bounds of San Leandro contributes sales tax, a profit to the sales rep and the owner of the dealership, but the car manufacturer certainly isn’t “local.”
Most businesses, however, have alternatives. Pasta Pomodoro? Try Bella Italia. Borders Books? Try Grey Wolf Books on E. 14th or World of Books in Pelton Center. Going to Safeway or Trader Joe’s? How about Estudillo Produce or Porter’s Market on Farnsworth, both locally-owned. Going to Starbucks or Peet’s? Well, let’s just say San Leandrans have a great selection of locally-owned coffeehouses to choose from.
This fits into the larger need for communities to focus on walkable human-scale cities and create communities in which residents can raise families without the lack of accountability our car culture brings by separating people from one another to the point that they are strangers… but I’ll save that for another article.
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