Civic Economics is a respected and well-known organization that has produced a long-line of studies that indicate the economic impact of buying local. Local dollars are said to recirculate 2-4 times when spent with locally owned businesses compared to multinational organizations because they:
- Recirculate greater profits in the community
- Create more local employment
- More often buy local products and services (especially local marketing and financial services)
- Donate more to local charities, non-profit groups and community organizations
In the BC study, Civic Economics assesses the local and Canadian market share of independent and chain business and calculates the economic impacts of locally owned business compared to their major North American chain competitors.
Here are some of the highlights:
- Local businesses in Canada have less than 1/2 the total market share on average. This has been dropping slightly each year since 2008
- Market share by local business has dropped approximately 15% in the last 11 years in both BC & Canada
- BC local retailers have the third lowest market share in the country. Local businesses captured just 34.7% of the market in 2010, in front of only Alberta & Manitoba (tied at 33.1%) and Nova Scotia (30.8%). We lag the Canadian average of 41.8% and are way behind local market share leaders in Quebec (54.7%)
- BC furniture & home furnishing stores have the highest market share by local business in the country
- BC food & beverage stores have the lowest market share by local business in the country
- BC local businesses creates double the economic impact of their chain competitors. They recirculate more than 2.6 times as much revenue in the local economy as chains (46.3% compared to 17.8% for chains)
- Local retailers recirculate 45% compared to 17% for chains
- Local restaurants recirculate 65% compared to 30% for chains
Civic Economics cites the greater labour intensity of local restaurants compared to retail stores as the reason for the greater economic impact.
The impact of buying local, even a few more purchases each week, can have a big impact on the local economy and on communities across BC.
Civic Economics assessed the impact of consumers increasing local purchasing by 10% and found it would create
- 31,000 jobs
- $940 million in wages to BC workers