A new study finds that money you spend at chain stores quickly leaves the community, while money you spend at local businesses helps make the neighborhood better.
Think about this the next time you go to the neighborhood CVS or Starbucks: You could do more for the local economy by visiting the small pharmacy or coffee place on the corner. How much more? According to a recent study for Louisville, Kentucky–which looks at the “local premium” of spending at local outlets instead of big chains–perhaps four times as much.
Civic Economics has been running the numbers for lots of towns and cities over the last 10 years. And the newest batch of studies–for Louisville, Milwaukee, Ogden, Utah, and the Six Corners area of Chicago–corroborate what at least eight similar ones have shown. Money spent at independent outlets is more likely to stay local than that spent at a chain. The study for Louisville found that independent stores recirculate 55.2% of revenues compared to 13.6% for big retailers, and that local restaurants recirculate 67%, while big chains do 30.4%.