I see a lot of push towards shopping local and supporting the local economy. However, the large national brands provide the same product for cheaper and provide more jobs than your local producer. Why should I pay more for an essentially equivilant product?
In: Economics
**Short version:** Shopping local keeps more money in the local economy, which is ultimately good for your experience of your area (and everyone else’s experience of it, too). Local businesses are also more responsive to community needs (demand), and tend to foster a better local culture.
**Long economics:** National and International chain businesses tend to take money from your community and move it elsewhere (to regional HQ, into paychecks for upper management, or to a different country). This makes sense, though; since they get everything except the local employees from national/international supply chains, what reason do they have to spend money locally? They don’t have any reason to, so they don’t. They always chose the option that’s the least expensive for the company, and that is to invest in nothing more than the wages for local employees. (**Example:** Walmart pays a Chinese company for a ton of hammers. They then pay a national executive who lives on the other side of the country from your town to make sure the hammers arrive at a Walmart distribution center. They pay *another* executive who lives in the biggest city near you to make sure those hammers get to your local store. When the hammers are sold at your local store, you pay the price that Walmart paid for each hammer, plus a tiny part of the salaries of those executives. None of that money is returned to your local community.)
Businesses that franchise (like Chick-fil-a) are a kind of middle ground because the owner is local and more of the money stays local, but the owner still sends some percent of profit or a flat sum back to corporate, away from the community.
Local businesses keep most of the money in community. When you spend money at a local business, the owner, who lives in your area, uses the money from his business to do things like buy a house, pay for services, send his kids to (local) schools, and buy the supplies for his store from local farms/producers. This increases the total wealth of the community, and creates more opportunities for new small business, employment, and development. This also generally leads to more tax money for local government, which can benefit schools, infrastructure, and public services.
**Long benefits:** Shopping local helps keep local shops in business. Having a good selection of local businesses can provide other, not-money-related benefits to the community.
Local businesses can often respond better to what people want. If you come in every week and ask for a certain item, your local store might start selling that item. A national brand won’t. Good local businesses are also more aware of community needs, and can act much more efficiently to serve those needs. They have to be, since they make all their money by serving local people. Think of the stereotypical local hardware store that lets the local farmers buy on credit until they make money at harvest time. A national brand won’t change to fit the community, and often just doesn’t care. This mean you’ll often get better service from local businesses, and have greater “say,” or more ability to effect business practices.
Because of this greater say, and because nobody likes to mess up the place they live, local businesses can be significantly more environmentally friendly than national brands. They also don’t have the ability to cause environmental catastrophes the way big brands do, just as a matter of scale.
Local businesses can also maintain and benefit local culture. A town that has the same set of chain restaurants and businesses as the towns around it becomes stagnant and boring. Variety is important, and differences can help build or define communities. Local businesses will also do things like work with local schools or sports teams to build community support for different groups. Local businesses are more likely than national businesses to host local events like school fundraisers or senior nights. All of these things connect the community and build culture, which offers more activity variety, more recreational options, and a greater sense of belonging for local residents. Basically, for most people, living in a town with a healthy culture and community is more pleasant and more fun than not.
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