Give a Gift To Our Economy: Shop Locally Owned This Holiday Season

The Broadside took a couple of days off for turkey, stuffing, and family fun. We're back today with a reminder of why we shouldn't spend our holiday shopping dollars without thinking about the impact of our choices.

by Stacy Mitchell

Whether to patronize a chain or a locally owned business is not top of mind for many holiday shoppers, but it should be.  It's a choice that has profound implications for our economy.

If you shop at an independent toy store, such as Be Beep in Annapolis, Maryland, you will likely see products made by Beka, a small toy manufacturer in St. Paul, Minnesota.

A family-owned business, Beka has opted not to sell to chains like Target and Wal-Mart. Doing so, explains co-owner Jamie Kreisman, would require moving production to low-wage factories overseas, which would eliminate what he and his brothers most love about the business: their relationships with their employees and working hands-on with their products.

Beka is healthy, but its future depends entirely on the survival of independent toy stores. Over the last decade, Wal-Mart and Target have aggressively overtaken this sector and now capture 45 percent of U.S. toy sales.

If you buy groceries for your holiday meals at an independent grocer, like Catalano's Market in Fresno, California, you will find lots of food produced by small-scale, local farmers, such as Paul Buxman.

A second-generation grower of peaches, Buxman nearly lost his farm selling to supermarket chains, which demand cutthroat prices and truckloads of perfect-looking, though often flavorless, fruit that only industrial farms can supply.

With bankruptcy looming, Buxman dropped the chains and forged relationships with independents like Catalano's. He works hard to give them the best fruit and they honor this by paying a fair price and accepting the natural ebb and flow of supply.

Today, Buxman's farm is back on track. Catalano's is doing well too, but owner Michael Catalano worries about Fresno approving still more chain supermarkets and recently a Wal-Mart. Since 1998, the top five supermarket chains, led by Wal-Mart, have doubled their market share and now capture nearly half of all grocery spending.

Patronize an independent CD store, like Waterloo Records in Austin, and you not only support a business owned by a music aficionado, but help to ensure opportunities for new artists. Many beloved bands got their start when a few store owners fell in love with their first albums and began recommending them.

That does not happen at Wal-Mart, Best Buy, and other mass merchandisers, which now account for more than half of all album sales, but stock only chart-toppers and have no room for unknowns.

Chain retailers have expanded dramatically over the last two decades. Home Depot and Lowe's, barely a blip on the radar screen in 1986, control half of the hardware and building supply market. Barnes & Noble and Borders account for half of bookstore sales. Every sector is now dominated by a couple of chains, and Wal-Mart dominates them all, capturing one of every ten retail dollars we spend.

We assume that the chains represent economic progress, but in fact they take far more out of our economy than they contribute.

As the chains have expanded, tens of thousands of independent retailers have lost their livelihoods and laid off hundreds of thousands of employees. A study by David Neumark at UC-Irvine found that every new Wal-Mart store actually eliminates many more retail jobs than it creates.

The expansion of the chains has triggered a cascade of losses in other economic sectors. Some three million U.S. manufacturing jobs have been eliminated since 1990, in part because the chains have pressured companies, including Black & Decker and Levi's, to slash costs by moving overseas.

The chains also return very little of what their stores take in back to the communities where they operate. A study in Maine by the Institute for Local Self-Reliance found that only 14 cents of a dollar spent at big-box store remains in the state's economy.

In contrast, the study found that independent retailers spend more than half their revenue locally. They bank at local banks, hire local accountants, advertise in local media, and require many other local services that chains do not. For mid-sized and smaller cities especially, this is a vital source of economic activity and jobs that pay a middle-class income.

In exchange for all the businesses and jobs they destroy, the chains offer us employment in their stores. Wages for most of these jobs are so low that many big-box employees rely on Medicaid, food stamps, and other taxpayer-funded programs to get by.

None of this looks much like progress. In fact, what the big-box model most closely resembles are the old colonial economies of the European superpowers, which were organized, not to improve the lives of the local inhabitants, but to extract their wealth.

This holiday season, we can declare our independence and begin building a more prosperous economy by forgoing the chains and seeking out locally owned businesses.

Stacy Mitchell is a senior researcher at the Institute for Local Self-Reliance and author of Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America's Independent Businesses.

Use the comments below to link to your own favorite local stores, craftspeople, and family farms.

Comments

[Jessica Bennett]

I live in the Boston Metro, and I'll be doing a lot of my holiday shopping at places like Wilson Farm in Lexington, Henry Bear's Park in Arlington, and Harvard Book Store in Cambridge.

I'm especially devoted to independent stores and small manufacturers when it comes to toys for my son. The attention they give to the standards of manufacturing makes me feel better about the safety of the products, especially now when it seems like there's a new recall every day.

[Christine Bower]

Tonight I'll be at the Davis Square Midnight Madness event (http://www.yourdavissquare.com/); it's been on my calendar for weeks.

Besides fantastic sales at three of my favorite clothing stores in all of Boston (Cibeline's, Poor Little Rich Girl and Black and Blues), deals at Kickass Cupcakes and Dave's Fresh Pasta, and at the hip little enclaves of funky gift shops Davis-Squared and Magpie (all of which will be open till midnight tonight!), this just gave me a whole new reason to go spend too much money: support local business!

[Amy McCaffree]

I hope more shoppers in and around Spokane, Washington, finally take this to heart. Our neighborhood business districts thrive because of locally owned businesses. Our one city newspaper has already laid-off reporters, editors, and designers because of their drop in ad revenue. Yet local developers continue to propose new big-box stores and ask the city ro amend the comprehensive plan and re-zone residential land.

Our Spokane Regional CVB doesn't say "come here to shop at the same stores as you have at home." Instead, it's our local wineries and tasting rooms, the farms and shops at Green Bluff, the unique boutiques, and personalized retail and restaurant experiences that are only found at locally owned businesses.

Thank you, Stacy and ILSR, for providing facts to help me speak in front of our city's planning plan commission.

[Dane Etter-Garrette]

In these uncertain and turbulent economic times that are gripping this country, we need to take a conscious effort in directing our money towards something positive, the independent business. The massive corporations making trillions of dollars will still profit during these hard times by extracting what wealth is left from the people. It takes a mindful shopper to recognize that the cheap quality, sweat shop produced, materialistic crap that is sold by these companies are not mere ‘bargains’ and cost the consumer much more than the rolled back price.

I grew up in North Conway, NH and I can remember seeing the small, independent businesses struggle and finally close following the opening of Wal-Mart. And now just this past year a Lowes and Home Depot were built and opened in the same year. It makes me sick to think that the town officials would allow these corporations to exploit the people and rip the area of its historic, small town atmosphere. Where is the joy in giving a gift that was made by children’s hands working eight hours a week? Why give a loved one some piece of crap that will break in a week? Take pride in the gifts you give and understand where they come from. Or get creative and make gifts. Save some money and create something.