A national survey of independent business owners conducted by the Institute for Local Self-Reliance in partnership with the Advocates for Independent Business coalition has found that Local First initiatives are boosting customer traffic and improving the outlook on Main Street, but policymakers need to do more to create a level playing field and ensure that small local businesses have an equal opportunity to compete.
The survey gathered data from 2,602 independent businesses across the country.
Among the survey’s key findings:
Sales Growth
Independent businesses reported revenue growth of 5.3 percent on average in 2013. The retailers surveyed experienced a 1.4 percent increase in same-store holiday sales, comparable to many competing chains.
Buy Local
Over 75 percent of businesses located in cities with active Local First campaigns reported increased customer traffic or other benefits from these initiatives. They also reported sales growth of 7.0 percent on average in 2013, compared to 2.3 percent for independent businesses in places without such an initiative.
Challenges
Competition from large internet companies was rated as the biggest challenge facing independent businesses, followed by supplier pricing that favors their big competitors, high costs for health insurance and escalating commercial rents.
Policy Priorities
Among independent retailers, the top policy priorities are extending the requirement to collect sales tax to large online retailers, eliminating public subsidies and tax breaks for big companies, and regulating the swipe fees that Visa and Mastercard charge.
Internet Sales Tax
More than three-quarters of independent retailers said that the fact that many online companies are not required to collect sales tax had negatively impacted their sales, with 41 percent describing the level of impact on their sales as “significant.”
Access to Credit
Of those businesses that applied for a bank loan in the last two years, 42 percent either failed to obtain a loan or received a loan for less than the amount they needed.
“This comprehensive survey makes clear the unparalleled role that local businesses play in the health and vitality of communities,” said Oren Teicher, CEO of the American Booksellers Association and Co-Chair of Advocates for Independent Business. “And it highlights, too, the challenges that these businesses are facing regarding equitable governmental policy and a level competitive playing field. However, the widespread acceptance of the localism movement — which shows the potential of small business advocacy — is a clear sign for optimism.”
“American consumers are realizing more and more every day that supporting locally owned businesses is good for local economies and local communities,” said Bill Brunelle, co-founder of Independent We Stand.
“This data confirms what we experience assisting communities with ‘buy local and independent’ campaigns — they are raising consciousness and driving more business to local independents,” said Jeff Milchen, co-director of the American Independent Business Alliance. “The data is inspiring and suggests the future will be bright for America’s entrepreneurs once we change policies that handicap independent businesses.”
“Our dealers are continuing to see evidence of the buy local message influencing attitudes, new customer acquisition and most importantly buying habits,” commented Michael Morris, vice president of marketing for TriMega, an association of office
supply resellers.
“This study shows us that once again, businesses located in communities that have Localist campaigns are doing better than those in communities without. But it also makes it clear that we need policies that level the playing field if we are to have the kind of success that results in more good jobs and more real prosperity for more people,” said Michelle Long, executive director of the Business Alliance for Local Living Economies.
Advocates for Independent Business (AIB) is a coalition of organizations that represent independent businesses.
Stacy Mitchell is a senior researcher with the Institute for Local Self-Reliance.
