A growing body of evidence indicates that “buy local” campaigns are helping small businesses compete in an extremely challenging economic climate.

Independent businesses in recent years have banded together to urge consumers to concentrate their buying power closer to home. “Buy local” and similar campaigns have been launched in dozens of cities and towns over the last few years.

“In the past four years, our membership has exploded,” Mary Rick, program director for the Business Alliance for Local Living Economies (BALLE), recently told Arrive Magazine.

Founded seven years ago, BALLE has grown to include some 60 small business networks in the United States and Canada representing more than 20,000 entrepreneurs. Along with the American Independent Business Alliance (AMIBA), BALLE is one of the two main groups committed to helping small, locally owned and sustainable businesses start buy-local networks.

Proponents of the “buy local” movement say such campaigns not only help reduce environmental impact, but also build vibrant local economies by keeping money circulating locally rather than elsewhere.

BusinessWeek recently put the economic argument for buy-local campaigns thusly:

Spending at local businesses, rather than at chain stores or online, helps local economies because those firms are more likely to buy from local suppliers and hire local service providers for needs such as accounting. The jobs that those dollars support stay in the community, rather than going to chains that consolidate their suppliers and back-office functions elsewhere. The profits, too, stay with local owners who spend in the community, rather than going to out-of-state owners or shareholders.

Detractors, on the other hand, say the economic benefits are negligible compared to the “untapped consumer dollars” and “higher-paying jobs” large businesses bring to local economies. They also call the buy-local ideology “smug and elitist” or “provincialist” and “isolationist.”

Nevertheless, amid the sinking national economy, some small-business owners are saying “buy local” efforts have helped insulate them from the worst of the downturn.

“Fed up with seeing local small businesses being ravaged by the economic downturn, some people are taking matters into their own hands. They’re trying to reverse the fortunes of mom-and-pop stores by becoming more organized in ‘buying local,’” the Wall Street Journal blog Independent Street recently said.

“Since the economic downturn began, we’ve seen an explosion of interest in communities looking to start Independent Business Alliances and buy local campaigns,” Jennifer Rockne, director of the AMIBA, recently said.

Moreover, Rockne continued, “These campaigns are making a huge difference for local businesses and their communities.”

“By far the most effective ‘buy local’ campaigns are those that have been undertaken by local business alliances. These coalitions typically include hundreds of business owners and citizens working together to prevent the displacement of local stores by chains,” according to the Institute for Local Self-Reliance (ILSR).

Currently, there are fewer measurable direct effects regarding buy-local practices than there are anecdotes about “buy local” benefits. However, some studies point to real improvements in local economies.

One recent national survey found that in today’s extremely challenging economic climate, independent retailers are holding their own and even outperforming many chains by emphasizing local ownership and community roots. The survey of more than 1,140 independent retailers, across a wide range of categories, found that holiday sales at independent stores declined less than those of most competing chains on average.

The survey, conducted by the nonprofit research organization ILSR, also found that independent retailers in cities with active “buy local” campaigns reported much stronger holiday sales than those in cities without such campaigns. Independent retailers in these cities reported an average drop in sales of 3.2 percent, compared to a steeper decline of 5.6 percent for those in cities without an active “buy local” initiative.

An identical survey last year likewise determined that independent businesses in cities with “buy local” campaigns reported stronger sales than those in communities without these initiatives.

In Portland, Ore., a recent survey of independent businesses in the city found that buying locally is “on the minds of many shoppers and this additional support is proving critical as local businesses try to weather one of the country’s worst economic contractions.” In the survey of Portland Buy Local member businesses conducted in January, 79 percent reported the campaign had a positive impact on their business; 68 percent even reported they had gained new customers as a result of it. “Those numbers are up from a similar survey two years ago in which 60 percent reported that their business had been positively impacted and 40 percent said they had gained new customers,” according to an announcement of the findings.

Since its start in 2006, Portland Buy Local’s membership has grown to 240 local businesses and nonprofit organizations. The group’s mission is to build awareness of why independent businesses are essential to the health of Portland’s local economy and community.

“The effort to revive local economies is occurring for the most part outside the media spotlight [...] in struggling communities, in the growing number of small-business associations sprouting up around the country,” the Christian Science Monitor recently reported of the rise in “buy local” interest and activity.

The publication ends its report with a quote on the movement’s future, from Michael Shuman, author of The Small-Smart Revolution: “In the current economic downturn, Americans are beginning to understand that their future prosperity lies in the community businesses down the street that employ their neighbors, pay the taxes, and promote local relationships and trust.”

Would such a campaign help your business?

Resources

Business Alliance for Local Living Economies

American Independent Business Alliance

Social (and Responsible) Networking
by Gwen Shaffer
Arrive Magazine, March/April 2009

Why Buy Locally Owned?
Sustainable Connections, June 18, 2008 (last modified)

The Benefits of Doing Business Locally
by Jeff Milchen
American Independent Business Alliance

To Beat Recession, Indies Launch Buy-Local Push
by John Tozzi
BusinessWeek, Feb. 27, 2009

An Urgent Call to ‘Buy Local’
by Tim Holt
The Christian Science Monitor, Feb. 9, 2009

The Top 10 Reasons NOT to Buy Local
by Zachary Barowitz
The Bollard, April 20, 2009

Is Buying Local Always Best?
by G. Jeffrey MacDonald
The Christian Science Monitor, July 24, 2006

How the Locals are Trying to Save Small Businesses
by Raymund Flandez
Independent Street (The Wall Street Journal), March 25, 2009

Independent Retailers Outperform Chains Over Holidays, National Survey Finds
Institute for Local Self-Reliance, Jan. 15, 2009

How to Start a Buy Local Campaign
Institute for Local Self-Reliance / BigBoxToolKit, 2007

Studies and Reports
Portland Buy Local / Portland Independent Business & Community Alliance

Big-Box Economic Impact Studies
Institute for Local Self-Reliance / New Rules Project

Survey Finds “Buy Local” Campaigns Boosted Holiday Spending at Independent Stores
Institute for Local Self-Reliance / New Rules Project, Jan. 23, 2008

Growing Support for Portland’s Independent Businesses Proves Critical in Economic Downturn
Portland Buy Local / Portland Independent Business & Community Alliance, Jan. 27, 2009