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4 Ways to Shop Local and Support Small Businesses in the Economy

Suppose you’ve just accepted a new job in another state, and there are two nearby areas where you could live. The first is a nice-looking suburb with well-kept houses and neat green lawns. But it’s in the middle of nowhere. There’s nothing within walking distance, not even a post office. To do any shopping, even just for groceries, you’d have to drive 20 minutes to the nearest shopping center.

Unfortunately, it’s tough these days for local businesses to stay open. They face stiff competition from big-box chain stores and online retailers, which usually offer lower prices and a more extensive selection. If you want to see your town’s local businesses survive and prosper, you have to go the extra mile – or more accurately, stay close to home – to shop there.

Why Shopping Local Matters

When you have shopping to do, it’s tempting to take the easy route and head down to the mall – or easier still, just browse Amazon. Major chain stores and Internet retailers offer a vast selection plus the convenience of one-stop shopping. On top of that, their prices often beat the local stores.

But keeping your dollars in your hometown has other advantages that are just as important as saving a few bucks, even if they’re not immediately apparent. By shopping locally, you reap such benefits as:

  • A Stronger Economy. Local businesses hire local workers. In addition to staff for the stores, they hire local architects and contractors for building and remodeling, local accountants and insurance brokers to help them run the business, and local ad agencies to promote it. They’re also more likely than chain stores to carry goods that are locally produced, according to the American Independent Business Alliance. All these factors together create a “multiplier effect,” meaning that each dollar spent in a local store brings as much as $3.50 into the local economy. By contrast, large chain stores tend to displace as many local jobs as they create because they often drive local retailers out of business.
  • A Closer Community. Shopping at local businesses gives neighbors a chance to connect. It’s easier to get to know someone you often see at a local coffeehouse than someone you only wave to on your way in and out of your house. Knowing your neighbors makes it possible to exchange favors, such as pet-sitting or sharing tools.
  • A Cleaner Environment. Having stores in your immediate neighborhood means you can leave your car parked and do your errands on foot or by bicycle. Fewer cars on the road means less traffic, less noise, and less pollution. If you made just one trip each week on foot instead of making a 10-mile round trip by car, you would reduce your annual driving by 520 miles. That would save about 24 gallons of gas and keep 0.2 metric tons of carbon dioxide out of the atmosphere, according to calculations from the Environmental Protection Agency.
  • Better Health. Running errands on foot is better for your health. Walking is great exercise that helps keep your weight under control, strengthens your heart, and prevents disease. A 2011 study published in the Cambridge Journal of Regions, Economy and Society found that U.S. counties with thriving local businesses also have lower mortality rates, a slimmer population, and a lower incidence of diabetes.
  • A Great Place to Live. The last factor is more difficult to measure than the others, but it’s just as important. Local businesses make your town a better, more interesting place to live. One suburban housing development looks much like another, but a town center with thriving local businesses has a feel that’s all its own. Local eateries, bars, bookstores, food markets, pharmacies, and gift shops all combine to give a place its unique character.

How to Support Your Local Economy

There are many ways to support businesses in your area. For instance, if you have a local hardware store, look there first when you need anything for your house instead of heading down to the big-box home-improvement store. Most towns have at least a couple of local restaurants or bars, and choosing these places when you eat out is another way to support your local economy. Or buy your produce from a local farmers market or shop for clothes at a local boutique.

Of course, all this depends on exactly which local businesses are available in your town. Since each town’s local economy is unique, the first step is learning what businesses you have around you, where they are, and when they’re open.

Woman Selling Fresh Baked Goods Farmers Market Local Business

1. Learn About Local Businesses

To learn more about local businesses in your area, set aside a day to explore your town and see what it has to offer. Since part of the benefit of shopping local comes from being able to run errands on foot, if possible, leave your car at home and focus on the area within walking distance.

If you’ve never really walked around your town before, a map will help you figure out where to go. A company called Discovery Map publishes colorfully illustrated maps of various towns that show places to stay, eat, shop, and entertain yourself locally. If there’s a map for your town, pull it up on your phone or tablet and use it as you explore.

If Discovery Map doesn’t have a map for your town, try your local chamber of commerce. In many areas, the chamber publishes maps or shopping guides to promote local businesses. Call or visit its office and ask whether a map is available for your town. If all else fails, find your location online and search for local businesses nearby, though the listings aren’t always accurate.

If you can’t find a guide to local businesses, make your own. Start at one end of the main street or one corner of the central shopping district and work your way along, making note of all the businesses you see along the way. When you see one that looks useful or interesting, stop and make a note of its name, location, and hours. Then, the next time you need to find a tailor, for example, you’ll know exactly where they are.

2. Shop Locally

Once you’ve identified local businesses in your area, the next step is to make shopping at them part of your usual routine. Since local businesses often can’t match the low prices of big-box stores, it’s challenging if you’re on a tight budget.

However, there are several ways to get around this problem:

  • Budget for It. Set aside a small sum in your personal budget each month specifically for local shopping. Then, when you want to buy something at a local store but you’re hesitating over the price, you have the money in your budget. For instance, if a local, independent bookstore is charging $20 for a book that’s only $14 on Amazon, count the extra $6 as part of your local shopping budget for the month.
  • Go Local for Services. Goods are often cheaper at big-box stores that sell cheap, mass-produced wares. However, services are often just as cheap (or even cheaper) when you buy them locally. For example, when I needed to print up a bunch of mailers for a folk festival I volunteered for, a local print shop gave me a better price – and was much more convenient to use – than Kinko’s. Likewise, taking a pair of worn-out shoes to my local shoe-repair shop for resoling is cheaper than buying a new pair.
  • Shop Local for the Holidays. Shopping local is an excellent choice for holiday gifts because a present feels more special when it comes from your own hometown. Each year, American Express sponsors an event called Small Business Saturday on the Saturday after Thanksgiving to encourage people to start their holiday shopping at local businesses, and many independent businesses offer special sales on this day. Other local businesses have exclusive deals or events for Plaid Friday, the day after Thanksgiving, as an alternative to the Black Friday sales at major retailers.

3. Eat Locally

Not all local businesses are useful to everyone. For instance, a children’s clothing store isn’t of much use to you if you don’t have kids. However, everybody has to eat, so shopping locally for food is one of the best ways to support your local economy.

A locally owned grocery store is a good place to start, but a farmers market is even better. Shopping there gives you a chance to meet not just the people who sell your food, but the people who grow it. The U.S. Department of Agriculture reports that the number of farmers markets in the country has increased nearly fivefold since 1994, so your chances of finding a market in your area are better than ever.

Doing your shopping at farmers markets has several advantages over supermarket shopping:

  • Quality. Farmers market produce is usually fresher than the goods sold at supermarkets. Since farmers grow the food locally, it hasn’t spent days or weeks traveling across the country. The fresher fruits and vegetables are, the better they taste, the more nutrients they retain, and the longer they stay fresh before you eat them.
  • Sustainability. Locally grown food doesn’t have to be shipped long distances, which reduces its carbon footprint – the amount of greenhouse gas produced in growing, harvesting, and transporting it. Also, most sellers at farmers markets are small-scale growers who can more easily adopt green growing practices. According to the Farmers Market Coalition, nearly half of all farmers markets sell organic products – and 3 out of 4 farmers who sell their goods at farmers markets grow food in a way that meets organic standards, even if they don’t have official organic certifications. Also, 48% of them use integrated pest management – a method of controlling pests with minimal damage to the environment – and 81% use soil health practices, such as growing cover crops and producing their own compost.
  • Information. Buying directly from the grower is the surest way to know where your food comes from and how it was produced. At a farmers market, the person behind the counter knows the answer to all kinds of questions a clerk at a supermarket doesn’t. For example, they can explain which varieties of apples are better for cooking and which are better for eating or tell you which breed of chicken produced the eggs you’re buying and how they raised the hens.
  • Atmosphere. Farmers markets are typically friendlier, more personal settings than big supermarkets. It’s much easier to strike up a conversation with a fellow shopper searching through a bin of melons at the farmers market than with a stranger pushing a cart past you at the grocery store. The Farmers Market Coalition also reports that in a 2015 survey, farmers market shoppers said they typically had 15 to 20 social interactions during each visit as compared to just one or two when they shopped at the supermarket.

Another way to support local farmers is through community-supported agriculture (CSA). Through a CSA, a farm sells shares of its crops for the year directly to consumers. If an entire CSA share is too much food for your family, you can split one with a neighbor and strengthen your community ties still more.

A final way to shop locally for your groceries is through a food co-op. A co-op is a grocery store that’s owned jointly by the people who shop there, so joining one gives you a say in what the store sells and how it’s run. Joining a co-op and attending its meetings is a way to meet and interact with your neighbors. And since most co-ops specialize in food that’s locally produced, including organic foods, it’s a way to support local growers.


What Is a Food or Grocery Co-op?

According to the Neighboring Food Co-op Association (NFCA), a New England co-op network, a co-op is “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.” Though the structure and activities of specific co-ops may vary, most co-ops’ activities are governed by these guiding principles (per the International Cooperative Association, a global co-op trade organization):

  • Open Membership. Co-op membership is open to “all persons able to use [co-op] services and willing to accept the responsibilities of membership.” Restrictions on the basis of religion, race, gender, or association with any other protected class are prohibited. One important exception: A co-op may restrict membership to residents of its home state. For example, the co-op I belong to only accepts Minnesota residents as members, though anyone may shop there.
  • Member Ownership. Each member has an ownership stake, known as a share, in the co-op. Members typically need to buy their shares, though some co-ops may offer free shares to employees. Some co-ops only allow members to buy a single share, while others allow members to buy unlimited shares. Some co-ops offer financial benefits for owners, such as shopping discounts and patronage refunds (monthly or annual checks refunding a portion of your purchases during the period). Some may even offer dividends based on the number of shares owned, though this isn’t common among food cooperatives. And since state and federal laws prohibit co-ops from offering an annual return on investment of more than 8%, you shouldn’t expect your co-op membership to make you rich.
  • Tax Considerations. According to the Small Business Administration, U.S.-based cooperatives are designated as pass-through organizations and aren’t subject to federal business taxes. However, members are liable for personal taxes on any profits or surpluses returned to them by the cooperative and not reinvested in the business.
  • Member Control. A co-op share comes with the right to vote for the organization’s leaders, board members, and strategic initiatives undertaken by the leaders or the board. Every member has equal voting rights, even if their co-op allows individual members to purchase more than one share. This is known as “one member, one vote.” Any member can run for a seat on the co-op’s board. Co-op boards may also organize committees and subcommittees, staffed with volunteer members, to govern specific aspects of the co-op’s operations or advise on strategic initiatives. However, hired staff – a general manager, department managers, and hourly staffers – typically oversee grocery cooperatives’ day-to-day operations.
  • Commitment to Education, Enrichment, and Community Development. Many co-ops devote significant time and resources to educational programming and community development and outreach initiatives. For instance, our co-op has weekly cooking classes where members can share their favorite recipes and techniques with others. It also sponsors dozens of local CSAs, nonprofit organizations (clinics, food banks, and shelters), neighborhood development corporations, and recurring events (such as National Night Out).
  • Focus on Local, High-Quality Food and Products. Though every grocery cooperative is different, co-op members and boards generally seek out local, organic, high-quality foods and dry goods that may be available in limited quantities, or not at all, at traditional supermarkets. They may also establish close relationships with local producers that may not meet the rigorous sourcing standards of Whole Foods and other grocery chains specializing in healthy, high-quality foods.

Benefits of Shopping at a Co-op

You don’t have to be a member to shop at your local grocery cooperative, though members do typically enjoy additional benefits not available to occasional shoppers. Whether you regularly visit or just pop in occasionally for something you forgot (or can’t find) at the supermarket, the advantages of co-op shopping are numerous:

1. Access to Healthy, Fresh Produce
Though every co-op’s selection is different, grocery cooperatives typically have ample produce sections that focus on seasonal, high-quality ingredients. Co-op buyers work with suppliers that can consistently deliver fresh items. And because co-op patrons tend to value fresh produce over packaged or frozen varieties, co-ops’ produce sections enjoy high rates of turnover, keeping product fresh and crisp.

By contrast, budget supermarkets with huge produce sections, lower quality control standards, and less turnover are more likely to keep wilted lettuce, browning apples, and soft carrots on display.

2. Supporting Local, Small-Scale Agriculture
Though most co-ops work with national organic food distributors, they also forge relationships with local, small-scale producers to a greater extent than supermarkets or discount grocery stores. When you buy locally grown or produced items at your co-op, you’re supporting your area’s farmers and agricultural businesses. This is true regardless of the season – for example, on midwinter trips to our co-op, my wife and I are always delighted to run into a guy handing out samples of the delicious maple syrup he produces just outside the city.

3. Being Socially Responsible
While not perfect, co-ops value social responsibility more than larger supermarkets, which are often part of big chains driven mostly by the profit motive. In the context of co-op shopping, social responsibility can take many forms. For instance, co-ops tend to stock lots of fair trade products, such as coffee and chocolate. To earn the fair trade designation, buyers must pay fair prices to growers and suppliers, often in developing countries. In turn, these producers must adhere to high standards of worker treatment and pay fair wages.

By contrast, large-scale producers that supply big supermarket chains – including some who qualify for organic certification – may routinely mistreat their workers (such as workers in Mexico, reported by the LA Times), housing them in overcrowded, company-owned shacks and withholding pay until the end of the harvest season, effectively prohibiting them from seeking other employment.

4. Reducing Your Shopping Habits’ Environmental Footprint
Buying local farm products at your co-op isn’t just good for the agricultural economy in your area – it’s also good for the environment. Locally grown and sold food, which the USDA defines as farm products grown and sold within a 400-mile radius, requires less energy for shipping and storage over its life-cycle. The co-op I shop at defines “local” as coming from within a 250-mile radius, and works with producers that fit the bill wherever possible. By contrast, much of the produce available in the nearby budget supermarket, regardless of season, comes from places like Texas, Arizona, California, and Mexico – anywhere from 1,000 to more than 2,000 miles away.

Food Coop Shopping Benefits