Indie Impact National Summary: Indies Give Back Over Three Times as Much as Chains

Communities as different as Las Vegas, New Mexico, and Louisville, Kentucky, have at least one thing in common: Their independent businesses recirculate a substantially greater proportion of their revenues back into the local economy than do their chain competitors. This, according to a national study, The Indie Impact Study Series: National Summary Report [1], a summary of 10 localized studies conducted by Civic Economics, in partnership with the American Booksellers Association, over an 11-month period from 2011 - 2012.

For the Indie Impact series, Civic Economics worked with small business organizations in 10 American communities to survey independent, storefront businesses engaged in the retail trade or food and beverage services.

As with previous studies in Austin, Chicago, San Francisco, Phoenix, Grand Rapids, and New Orleans, Civic Economics compared the recirculation of revenue in the local economy for participating independent businesses with that of major chain competitors. In total, 106 retailers and 28 restaurants answered the survey. Reports were compiled for each community, as well as an aggregated national study summary.

Among the national study’s findings:

• Nationwide, local retailers and restaurants for all completed surveys recirculate 52.3 percent of revenue locally, while chains recirculate just 15.8 percent. This means indies keep 3.3 times as much revenue in the local economy as do their chain competitors.
   
• Looking at just retailers, local businesses recirculate 47.7 percent of revenue locally, compared to 13.6 percent for chains, meaning indie retailers keep 3.5 times as much revenue in the local economy.
  
   
• Nationwide, by retail segment, sporting goods, book, and music stores combined recirculated 39.1 percent of revenues locally.

“Each Indie Impact study further drives home the point that we’ve been making for years that shopping at your local, independent retailer is better for the fiscal health of a community,” said ABA CEO Oren Teicher. “At a time when many cities and towns are faced with budgetary and job creation challenges, these figures simply provide yet another great reason for shopping local.”

For each study, Civic Economics asked local businesses to provide the proportion of revenue expended in five categories: Profits paid out to local owners; Wages paid to local workers; Procurement of goods and services for internal use; Procurement of local goods for resale; and Charitable giving within the community.

For chain competitors, the aggregate value of these was estimated from public records.

The Indie Impact Study Series examined the following 10 communities: Andersonville, Chicago; Bainbridge Island, Washington; Chicago, Illinois; Las Vegas, New Mexico; Louisville, Kentucky; Milwaukee, Wisconsin; Ogden, Utah; Pleasanton, California; Raleigh, North Carolina; and Six Corners, Chicago.

Stores, community groups, or independent business alliances that are interested in participating in a new round of the Indie Impact Study Series [2] should contact Dan Houston [3] at Civic Economics to discuss participation.