Independent Retailers Outperform Many Chains Over Holidays

Jan. 15, 2010 by GO LOCAL Staff

Locally-owned independent businesses outperform average retailer sales during 2009 holidays. Those with active Buy Local campaigns fared best.

 BOZEMAN , MT– In an extremely challenging economic climate, independent retailers are outperforming many chains, a national survey has found.

The survey of 1,142 independent retailers in a wide range categories (books, toys, clothing, etc.) and across all 50 states found that holiday sales at independent stores declined an average of 5.0% from the same time period in 2007.  That compares favorably to most competing chains, including Barnes & Noble (- 7.7%), Best Buy (-6.5%), Borders (-14.0%), JC Penney (-8.1%), Macy's (-7.5%), The Gap (-14.0%), and Williams-Sonoma (-24.2%).  

This week, the Commerce Department reported that December retail sales overall were down a record 9.8% over December 2007.

Of special interest to independent businesses, the survey also found that local retailers in cities with organizations effecting permanent “Buy Independent/Local” campaigns reported much stronger holiday sales than those in cities lacking such efforts. Well over one hundred such groups have formed across the country in recent years. Independent retailers in these cities still saw a decrease in sales compared to last year, but the drop was 3.2% -- far less than the 5.6% decline reported in cities without permanent “Buy Local” organizations.

The survey was conducted by the Institute for Local Self-Reliance, a nonprofit research organization, in partnership with several independent business organizations, including the American Booksellers Association, American Independent Business Alliance, American Specialty Toy Retailers Association, Business Alliance for Local Living Economies, Independent Music Store Owners coalition, and National Bicycle Dealers Association.
"Since the economic downturn began, we've seen an explosion of interest in communities looking to start Independent Business Alliances* and buy local campaigns," said Jennifer Rockne, director of the American Independent Business Alliance ." This survey shows such interest is justified. These campaigns are making a huge difference for local businesses and their communities."

"Given the results of this survey, it's no surprise an overwhelming majority of shoppers are telling independents that the fact that they are locally owned matters a great deal," said Oren Teicher, chief operating officer of the American Booksellers Association. 

"This invaluable data is proving the case that communities are rallying behind independent businesses," said Doug Hammond, executive director of the Business Alliance for Local Living Economies.

An identical survey last year likewise found that independent businesses in cities with “Buy Local” campaigns reported much stronger sales than those in communities without such an initiative. Ninety-five percent of the retailers surveyed said the fact that their business is locally owned matters to their customers -- up from 82% in last year’s survey.

"During this holiday season, many more customers mentioned their intentional shopping at local businesses," said one survey respondent. "I think that the tough economy this year played a huge role in my customers intentionally shopping locally. They felt strongly about supporting those of us who are sticking it out," said another.

“While most economic recovery stories focus on national policy, finding ways to recycle money within the local economy is the most effective economic stimulus for most communities,” according to Jeff Milchen, AMIBA co-founder. Milchen recently published a feature in the San Francisco Chronicle, “The Next Bubble to Burst?” exploring damaging consequences of retail over-capacity and the importance of local ownership.

"Even as household budgets shrink, many people are choosing to direct more of their spending to local businesses,” said Stacy Mitchell, senior researcher with the Institute for Local Self-Reliance. “This could be a key factor in getting the economy back on track.  Study after study has concluded that locally owned businesses deliver more jobs and significantly greater economic benefits to their communities than chains do.” Mitchell also recently published a related op-ed in the Minneapolis Star Tribune.