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Shopping local benefits local economy more, new study says

Published: Wednesday, Aug. 15 2012 7:54 p.m. MDT

Zoe Brusa, Tate Brusa, Lane Brusa and Caroline Boyden shop at Harmons in Salt Lake City on Wednesday, Aug. 15, 2012. Local business and civic leaders unveiled a new economic study that shows spending money at local businesses can have a bigger impact on the local economy than spending at national chains.

Laura Seitz, Deseret News

SALT LAKE CITY — Spending money at local businesses can have a bigger impact on the local economy than spending those same dollars at national chains, a new study states.

Research conducted by Civic Economics detailing the amount of revenue returned to the local community by locally-owned, independent businesses showed that 52 percent of all revenues went back into their communities compared to about 14 percent for national chain stores.

The report also indicated that local eateries returned nearly 79 percent of revenues compared to just over 30 percent for national restaurants.

Overall, locally-owned, independent businesses return 382 percent more dollars to the Salt Lake City economy than chain retailers, explained Nan Seymour, executive director of Local First Utah.

“Four times the amount of dollars stay in our community when you spend at a local business," she said.

Seymour said the study also concluded that shifting just 10 percent of purchases from national chains to local retailers and restaurants would keep $487 million in the Utah economy — money that currently leaves the state to be spent elsewhere.

The survey included 15 retailers and seven restaurateurs — all independent and locally owned.

For comparison, Civic Economics analyzed annual reports for four major national chain stores — Barnes & Noble, Home Depot, Office Max and Target. Those stores recirculated an average of 13.6 percent of all revenue within the local markets that host its stores.

In addition, the report analyzed data from three major national restaurant chains — Darden (Olive Garden, Red Lobster), McDonald’s and P.F. Chang’s. Those restaurants returned an average of 30.4 percent of revenue.

"Every study we've conducted around the country has shown that shopping locally can keep at least three times more revenue in the local economy," said Daniel Houston, partner at Civic Economics. "Salt Lake City is no exception. If anything, the 'local effect' may be even stronger in Utah."

Speaking after a new conference Wednesday in the Emigration neighborhood, Salt Lake City’s economic development director said if shoppers consider the long-term benefit of patronizing local businesses, the greater the impact on the local economy.

“The more that we support our local businesses, the better they do,” said Bob Farrington. “The more they can provide local jobs and local products … and the more revenue we all receive from that.”

Betsy Burton, co-owner of the King’s English Bookshop, said she has noticed a distinct trend recently of more people choosing to “shop local.”

“It’s always been something that we felt in our gut, but we always wanted to be able to prove it,” she said. "Now with this study, we know that it's (true)."

She added that her bookstore has experienced a 12 percent increase in sales since January, despite the competition of national chains and the Internet.

“Local is becoming a huge movement,” Burton said. “People really care about their community.”

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