Retail sales endured the steepest holiday season drop since the Great Depression last year, falling 9.8 percent from the previous December. But while news was bleak for most retailers, a close look at the breakdown of those declines offers valuable clues to enhance the local economy.
A nationwide survey of independent retailers found their average holiday sales declined just 5 percent from 2007 to 2008 — comparing favorably to most competing chains. The survey also indicated local retailers in cities with organizations devoted to “Buy Independent/Local” advocacy experienced much stronger sales than those in cities lacking such efforts.
The new Capital Area Independent Business Alliance (CAIBA) is being initiated to
bring those benefits to Springfield area businesses, and the timing couldn’t be better. Local ownership is critical to community prosperity, not just
because independent businesses create the majority of new jobs, but because of
the kind of jobs they create. Whether they hire staff directly or contract with
other local businesses, independents create opportunities for local designers,
accountants, computer consultants, attorneys and many others skilled positions.
Independents also carry a higher percentage of locally-produced goods than
chains, meaning more jobs for area manufacturers and farmers.
In contrast, a new chain store typically is a clone of other units, both eliminating the need for local planning and minimizing use of local goods and services. Those “economies of scale” boost corporate profits but detract from the local economy. Few of the jobs involve career opportunities, and profits are exported promptly to corporate headquarters.
The CAIBA will join more than 60 other communities which have formed Independent Business Alliances in recent years. These groups help local businesses work together through group purchasing, marketing, public education, advocacy and other activities to prevent local entrepreneurs from being displaced. They also help strengthen community cohesiveness and character in an era of homogenization.
Whether you are involved in a local business or simply care about the future of
your community, I hope you’ll attend the community forum next Thursday (details below) to learn some
success stories from other communities and get involved in guiding the future
of your region.
Jeff Milchen is a co-founder of the American Independent Business Alliance (AMIBA.net) a nonprofit organization which helps communities organize to support local entrepreneurs and build vital, sustainable economies. He will speak and facilitate a subsequent workshop (free) starting at 8 a.m. May 7 at Amber Jack Alehouse. See IBuySpi.com for more information.