Shopping locally was the absolute norm to our predecessors and has become somewhat a fashionable and rebellious statement against chains and supermarkets. It’s a statement which local businesses support for their own growth and staying power but does it hold water?

Buying local produce in local shops is good for farmers and cottage industries, good for agricultural land, better for the ecological impact, the green issues of recycling, climate change and so on but, in these leaner times, is it better for our local economy?

A supermarket will generally pass the vast majority of its finances out of the region, finding produce at the lowest cost, transporting it at lowest cost and selling it at the highest rate it can convince the shoppers to pay for it. The profit returning to the coffers of business and the least money to the originator, out of the area.

There are exceptions, it is well advertised by some supermarkets and by the likes of media community and standards champions that they only sell milk produced within a 50 mile radius of the store, or that all their chickens will be at the basic level caged but not battery hens.
A local store will generally buy locally, mutually supporting those farmers and cottage industries, pay rent or tax locally and spend their profits locally.

It is suggested that this could return money into the local economy of up to 30% of expenditure or higher, thereby enriching the community and providing more opportunity for local business growth and expansion, though only with selective tenancy. Two local grocers supplying the same produce will serve only to cost the local economy in undercutting one another, seeking least cost suppliers in order to reduce prices and attract custom.

Businesses banking could further affect the matter. If a bank loan is to be repaid to a national bank or they have banking charges, money slips back out.

In depth studies in two states in the US in 2002 and 2003 found that up to 55% of each $100 spent in local business may return back to the local community. The studies demonstrated that in each case, the local returns from the national companies were just $13 and $15 in each $100 spent, compared to the figures of $45 and $55 per $100 spent in local stores. This figure shows that each community could potentially increase the local wealth by 66%.
In one instance, those figures translate to a local return of 0.8 million USD from a national company with an increase in purchases but a decrease in local investment. In contrast, the local company made a return of 4.5 million USD into the community. It seems clear and compelling evidence that local investment is the way forward.

Cost is a great concern right now, finding ways to reduce expenditure and tighten the belt during recession is the new interest of many. Money saving is more fashionable than ever and people are finding more and more creative ways or doing just that. People are reducing leisure expenditure (and shopping for the fun of it) and finding new ways to fulfill the retail therapy buzz.

Smaller local businesses often have slightly elevated prices in comparison to supermarkets, because they cannot buy, transport nor store in bulk, increasing the individual price per item. This cost is then passed to the consumer who may balk and compare the cost to Astewamoburys (Asda, Tesco,Waitrose, Morrisons or Sainsburys).

In theory, the greater the reinvestment in local business, the greater the local business and in turn more local businesses are created to meet the need but reduce the cost, a miniature model of national economy but to the benefit of people close to you and eventually to each person.

What’s more, local produce may benefit you physically. The delay from harvest to kitchen might be a week when purchased at a supermarket and in contrast might only be 24 to 48 hours in a small local business. You glean the advantage of the retained nutrients, rather than the loss where sugar turns to starch, plant cells collapse and dehydrate, vitality wasted.