Hello All,
I've heard numerous folks make statements that a high volume Dunkin Donuts at the corner of Manville would be a good thing for our village and increase business for the other nearby businesses. But, this is actually a WRONG assumption according to numerous studies cited below. Hence, my push to help foster and encourage locally owned businesses (aka formula business ordinance).
There are a number of studies that proved that locally owned businesses had a greater impact on a local communities than chains/national owned businesses. I've summarized this info. All information was from a book called "Big-Box Swindle", Stacy Mitchell 2006. Pick it up from our local bookstore or the library.
1) In 2004, Andersonville's (in the Chicago area) Chamber of Commerce commissioned a study of the economic impact of local businesses on the community. The study examined the local spending habits of 10 locally owned business. Locally owned business invested 50% more in the local community than non-local businesses (e.g.). Examples of spending more were on procurement (e.g. relying on local attorneys, printing shops, advertising mediums, designers, etc) and staff. (The Anderson Study of Retail Economics, Civic Economics, October 2004)
2) In 2004, 2 university professors conducted an analysis of three thousand counties examining the prevalence of locally rooted economic and social institutions (e.g. churches, associations, etc). The analysis found that counties with a large number of locally owned business and institutions generally had higher median income, less income inequality, and lower unemployment. Also, these communities had greater participation in local affairs and civic organizations. (Michael Irwin, 2004, "A Multilevel Model of the Effects of Civic and Economic Structure on Individual Nonmigration.")
3) In 2005, a university professor analyzed the civic and social value of locally owned retail businesses. In states in which a larger share of retail activity captured by locally owned businesses ranked better on a wide range of social, economic, and civic measures. Poverty, crime, and infant mortality are all lower in local retail states than those with a greater share of chain stores. (Charles Tolbert, "Minding Our Own Business: Local Retail Establishments and the Future of Southern Civic Community." Social Forces 83, June 2005)
Why Ownership MattersHow can this be... the answer lies partly in the fact that local owners are both financially and personally vested in their community. To a chain, a town is little more than a place to extract profit. For a local business owner, it's a home. So, relationships are important. Frequently personal and community roots influence business decisions, which often reflect a broader range of concerns than simply maximizing the bottom line. Studies have found that frequently local business owners will make decisions that are not economically rational, but generate tangible community benefits. A frequent example heard by the researchers was instead of laying off staff in hard times everyone would cut their hours.
Just want to make sure people are aware of what is true and what is marketing spin.
-Ben
