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Small Business Digest


Signs Grow That Shoppers Are Returning to Local Merchants

Seeming to confirm a trend first picked up by this newsletter’s parent, Information Strategies, Inc., Americans are turning to their neighborhood and local retailers.

During the past holiday season, Americans shopped and spent more locally while shunning some national chains, according to a survey conducted in the first two weeks of January.

While major chains reported better sales, they didn't match those of previous years.  The recession has affected retail sales across the board.  However, consumer focus groups are surfacing a growing awareness of the need to support local merchants.

The trend appears to benefit some groups more than others. One example is Zales, a national jewelry retailer, whose sales were down 17% during November and December.  Sales of competitor Kay were up, but combined, the two chains were off from 2008.

At the same time, local jewelers reported increases in a national survey.

According to one survey of 1,800 independent businesses and retailers, sales were up an average of 2.2%. That contrasts with the Commerce Department figures released Jan. 14 which show that overall retail sales were down 0.3% in December and up 1.8% in November.

The survey was conducted by the Institute for Local Self-Reliance, a nonprofit research organization, in partnership with several business organizations, including American Booksellers Association, American independent Business Alliance, American Specialty Toy Retailers Association, Business Alliance for Local Living Economies and National Bicycle Dealers Association.

The survey also found that independent retailers in cities with active "Buy Local" or "Think Local First" campaigns reported stronger holiday sales than those in cities without such campaigns. These campaigns have been launched by local business alliances in more than 100 cities and towns. Independent retailers in these cities reported an average increase in holiday sales of 3%, compared to 1% for those in cities without an active Buy Local initiative.

Nearly 80% of those surveyed said public awareness of the value of choosing locally owned businesses had increased in the past year (16% said it had stayed the same).

"The buzz about buying local was louder among my customers this year than any other year," said a shoe-store owner in Michigan.

"We've had many customers say they are making a real effort to 'Buy Local' this year. A number of customers said they saw an item at a chain store or online, and came back to us to purchase it," a retailer in Maine said.

A bookstore owner in Oregon added that the growing public awareness and support for independent businesses "has been critical to our ability to stay in business during down economic times."

According to the survey’s sponsors, similar polling in 2009 and 2008 likewise found that independent businesses in cities with Buy Local campaigns reported stronger sales than those in communities without such an initiative.

"This survey adds to the growing body of evidence that people are increasingly bypassing big business in favor of local entrepreneurs," said Stacy Mitchell, senior researcher with the Institute for Local Self-Reliance.

"Amid the worst downtown in more than 60 years, independent businesses are managing to succeed by emphasizing their community roots and local ownership."

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