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The San Francisco Retail Diversity Study
 
Shopping with Locally-Owned Merchants Could Net San Francisco $200 million and 1,300 New Jobs 
Study Indicates that Slight Shift in Purchasing Habits is Key to Sustaining City’s Unique Character and Bolstering the Economy

Among the study’s key findings:
  • A slight shift in consumer purchasing behavior -- diverting just 10% of purchases from national chain stores to locally owned businesses – would, each year, create 1,300 new jobs and yield nearly $200 million in incremental economic activity.
  • For purchases where quality goods or knowledgeable service are especially important, shopping with a locally owned merchant can reward consumers with a more satisfying experience and enhance the value they receive.
  • Municipal policies tend to favor large chains and developers, and urban governments frequently subsidize developments designed for large numbers of chain stores.
  • The City of San Francisco and the various public institutions, which account for large volume purchases, can actively seek local bidders and provide assistance with procurement processes.
  • A substantial impact may also be achieved if public officials and institutions conscientiously seek local providers for routine, no-bid purchases.
  • The independent merchants of the city provide the community with a tremendous injection of economic activity.
     
“San Franciscans and visitors can significantly sustain and improve the uniquely rich character and the economy of our city with just a slight shift in their shopping patterns,” said Hut Landon, Executive Director of the San Francisco Locally Owned Merchants Alliance, which commissioned the study.

http://www.civiceconomics.com/SF/            Download the Full Study              Download the Executive Summary              Download Talking Points
For additional studies, we recommend the Institute for Local Self Reliance's website on New Rules.

Local Businesses Key to Income Growth

Does Local Ownership Matter?

 Study conducted by economists Stephan Goetz and David Fleming, both affiliated with Pennsylvania State University and the Northeast Regional Center for Rural Development
 
Key findings:
  • The key to reversing the long-term trend of stagnating incomes in the U.S. lies in nurturing small, locally owned businesses and limiting further expansion and market consolidation by large corporations.
  • Resident-owned small firms have a statistically significant and relatively large positive effect on income growth.





 

Corporate Subsidies

Shopping for Subsidies: How Wal-Mart Uses Taxpayer Money to Finance Its Never-Ending Growth - May 2004
By Good Jobs First

Key findings:
  • Walmart has received more than $1 billion in economic development subsidies from state and local governments across the country. Taxpayers have helped finance not only Wal-Mart stores, but also the company’s huge network of distribution centers, more than 90% of which have gotten subsidies. The report also includes policy proposals

Good Jobs First also offers a Grassroots Guide to Investigating Development Subsidies, a comprehensive guide to researching state and local subsidies, economic development agencies, and companies.

Bay Area Grocery Industry

Supercenters and the Transformation of the Bay Area Grocery Industry: Issues, Trends, and Impacts - January 2004
By the Bay Area Economic Forum

Key findings:                              
  • This study examines the potential impact of supercenter development in the 12-county region around San Francisco. It concludes that consumers would see a reduction in the price of groceries, at least initially, but these savings to the region would be offset by declining wages among supermarket workers. Unionized supermarket workers, according to the study, receive on average $11.68 an hour more in wages and benefits than supercenter employees. Wal-Mart's arrival would likely lead to both job losses and wage concessions at unionized supermarkets.
  • Although many cities assume superstores will provide tax benefits, the study examined 116 cities in the twelve county area and found that the presence of one or more big-box stores did not in fact correlate with higher per capita sales tax revenue, except in very small towns. The study also discusses the impact of supercenters on rural versus urban markets, traffic, tourism, and retail vacancy. (excerpted from ILSR)

Grand Rapids, MI

Local Works! - Examining the Impact of Local Business on the West Michigan Economy

Key findings:   

This study examined the impact of a 10% shift in market share from chains to locals across the retail landscape. The results were significant.

 An additional 1600 jobs could be created in Kent County with wages of $53 million being added to local payrolls if such a swing in purchasing behavior could be achieved. The 1600 additional jobs created would have been enough to increase employment by one-half of one percent in 2007. Output for the county could be increased by $137 million as well.

Chicago, Illinois

Andersonville Study of Retail Economics - October 2004
By Civic Economics

Civic Economics, the Andersonville Development Corporation, and the Andersonville Chamber of Commerce collaborated on this study, designed to evaluate the economic role played by the independent businesses of this dynamic district on Chicago's North Side.

Key findings: 

  • For every $100 in consumer spending with a local firm, $68 remains in the Chicago economy vs. $43 for spending at a chain store.

  • For every square foot occupied by a local firm, local economic impact is $179 vs. $105 for a chain store

New Orleans, LA

Thinking Outside the Box
 
This post-Katrina study examined two models for restoring commercial services to the city by focusing on the rebuilding of one hard-hit retail corridor – Magazine Street. One called for a SuperTarget big box store as the anchor tenant. The other called for restoration and rejuvenation of the existing locally owned businesses.
 
Key findings:
 
Comparing the local economic activity as a function of land use, 179,000 sq. ft. of local merchants would achieve sales of $105 Million, of which $33.6 Million would recirculate through the local economy. The same 179,000 sq. ft. of retail supercenter would consume an additional 300,000 square feet of parking and achieve sales of $50 Million, of which only $8 Million would recirculate through the local economy.
 
Local retailers, when compared to leading chain competitors, generate twice the annual sales, recirculate revenue within the local economy at twice the rate, and, on a per square foot basis, have four times the economic impact. Investing in locally owned businesses is a cost-effective way to grow the New Orleans economy and is compatible with development patterns in existing commercial districts.

A Downward Push

The Impact of Wal-Mart Stores on Retail Wages and Benefits

By UC Berkeley Center for Labor Research and Education 

Key findings:
  • Employees at Wal-Mart earn lower average wages and receive less generous benefits than workers employed by many other large retailers.
  • Wal-Mart store openings lead to the replacement of better paying jobs with jobs that pay less. Wal-Mart’s entry also drives wages down for workers in competing industry segments such as grocery stores.

 

Wal-Mart's Effect on Area Businesses

The Impact of an Urban Wal-Mart Store on Area Businesses:
An Evaluation of One Chicago Neighborhood’s Experience

By the Center for Urban Research and Learning Loyola University Chicago, December 2009


Key Findings:

  • The opening of a Wal-Mart on the West Side of Chicago in 2006 led to the closure of about one-quarter of the businesses within a four-mile radius. 
  • By the second year, 82 of the businesses had closed.  
  • These closures eliminated the equivalent of 300 full-time jobs, about as many Wal-Mart added to the area.
  • Sales tax and employment data provided by the state of Illinois for Wal-Mart's zip code and surrounding zip codes confirmed that overall sales and employment in the neighborhood did not increase, but actually dipped.
  • There is no evidence that Wal-Mart sparked any significant net growth in economic activity or employment in the area.
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