Shopping Local Builds Community and the Neighborhood Economy


Michelle Wallace

– VOL. 11

A giant banner spans the entire length of my nearest corner market, declaring, “Shop local! Shop small!” In general, people do shop local—for things they forgot to get at the grocery store, for special treats, when they want to grab something quick, or don’t want to go across town to the grocery store. They shop local for convenience sake, and also, to support small businesses, as that’s how it’s often put, as if shopping local-only benefits the business itself. But shopping local invariably helps the community as a whole.

Business corridors, where restaurants, cafes, art galleries, boutiques, bookstores, gift stores and the like are situated, are vital to communities. It’s where people gather and meet, where events happen, where people take part in their communities and create the particular culture of the place. The more businesses that there are in these areas, the further their reach and the farther people will travel to come visit them. 

In these areas, small, locally-owned businesses contribute to the local color of the community, both by reflecting what the people of the community like and ask for and by whatever it is that sets their business apart. These two attributes—local color and the density and amount of businesses—draw people to come from further away.

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Neighbors browse records outside a locally-owned record shop in the residential neighborhood of Hollywood in LA.

With vibrant business corridors that are made up of mostly small, locally-owned businesses, the character of the community is both reflected and created and the local economy thrives. Small, local businesses build the local economy in several ways.

They create jobs, often employing people from the community they serve. More of the money the business makes stays within the community, through taxes paid by the business and the employees, and by sales revenue.

Their employees spend more of their earnings within the local community and small business owners often work to support other local businesses, either through purchasing products, supplies or services from local businesses or doing marketing campaigns or events together.

Studies have shown that 68 of every $100 dollars spent at a local business stays in the community. This is six times more than what stays in the community when people shop at massive online retailers such as Amazon—communities actually lose money when shopping from Amazon.

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In Tel Aviv, a local, women-owned wine shop often hosts events for the community like wine tasting and happy hours.

Local small business owners are also much more likely to invest in their community in non-financial ways that do ultimately contribute to the economy. For one, local businesses hire locally. Having a hopping small business district creates opportunities for other businesses. As reported by NerdWallet, “You get a bandwagon effect, with more entrepreneurs wanting to enter the market… whether it’s a brewery, coffee shop or grocery store. It becomes a neighborhood.” Additionally, local small business owners are much more likely to contribute to local charities, with small businesses donating 250% more than larger businesses to local community causes. 

Marketplaces—farmers markets, Christmas markets, or pop-up markets that happen on a regular schedule but aren’t a permanent fixture—also immensely contribute to the health and vitality of communities.

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Farmers markets in Kansas City offer locals the opportunity to get fresh, seasonal produce and support small farmers in the area.

In addition to contributing to the local economy in the same way that small, local brick-and-mortar businesses do, these markets tend to pump money into rural areas by supporting farmers, who often bring more than just food—crafts made out of the by-products of their products. For example, homemade beeswax candles sold alongside honey or soaps made of herbs and flowers sold alongside bouquets of flowers. These types of markets often have aspects of events, with live music, and places to sit and enjoy fresh local food, which draws more people who stay longer. Weekly or monthly outdoor markets add to the local character, making it more of a destination for people to visit, and bringing more money into the community. 

Big box stores and regional malls have similar effects on business corridors, causing local businesses to go out of business. Major online retailers, chain retailers and regional shopping malls also do not contribute to local economies—communities tend to lose money when its citizens shop global retailers, and these big businesses don’t contribute to local charities or events and cause a lot of the locally-owned businesses to go out of business.

Buying small, buying local directly, positively impacts the local economy and community in myriad ways, creating a vibrant, resilient community. One of the ways that Venn promotes small, locally-owned business is by increasing the convenience factor of these small businesses. We do this by featuring local businesses and services in the virtual marketplace of our app, giving neighbors the chance to order from their phones for delivery or pick up.