New Study: Buying Locally Pays Big Dividends for Maine’s Economy
For immediate release
(PORTLAND, Me.) A new study produced by the Maine Center for Economic Policy (MECEP) has found that, on a dollar-for-dollar basis, the local economic impact of independently owned businesses in Portland is significantly greater than that of national chains. MECEP found that every $100 spent at locally owned businesses contributes an additional $58 to the local economy. By comparison, $100 spent at a representative national chain store in Portland yields just $33 in local economic impact.
“Jobs are the most pressing issue on everyone’s mind. Because locally owned businesses keep their profits in the community and are more likely to purchase goods and services from local sources, consumer spending at these businesses has a multiplier effect that increases local economic activity and creates jobs,” said Garrett Martin, Executive Director of MECEP and co-author of the study.
The study finds that changes in consumer spending choices can add up to sizeable economic benefits for the region. Based on 2007 retail sales figures, shifting just 10% of consumer spending in Cumberland County from national chains to locally owned businesses would result in an additional $127 million in economic activity, supporting 874 new jobs and generating over $35 million in wages.
MECEP relied on financial data provided by 28 independent businesses in Portland and information obtained from corporate filings for a representative national chain (Dollar Tree) to model local economic impact. Previous studies of the economic impacts of local businesses in other locales have produced similar findings.
The study was commissioned by the Portland Independent Business & Community Alliance (PIBCA), the nonprofit organization behind Portland’s “Buy Local” campaign. “Until now, we have had to rely on studies from other states to make the case that choosing locally owned, independent businesses generates significant benefits for our region’s economy. This study provides compelling data that is specific to Greater Portland,” said Susan Tran, president of PIBCA.
“Not only is Portmanteau a locally owned business, but we make our products right here in the shop,” said Nancy Lawrence, proprietor of the Portland clothing and accessories store. “We provide a lot of added value to the local economy, because so much of the cost of our goods goes to the wages of the artisans, who in turn spend their money in the community. That’s not the case with national chains, where it’s hard to find anything made in America, much less locally.”
“When a customer gets a movie at Videoport, the majority of what they spend goes directly into the local economy through our payroll, rent, utilities, and local taxes. When they get a movie online, all of what they spend could leave the state,” said Videoport owner Bill Duggan.
“Our success for over 77 years has been built on the strength of supporting and being supported by other local businesses, as well as individuals in our community. Relationships are built, friends are created and our community flourishes,” said Tom Skelton, president of Maine Hardware.
About MECEP — The Maine Center for Economic Policy was established in 1994 with the mission to promote a sustainable and equitable economy through analyzing and proposing solutions for Maine’s economic and fiscal challenges. www.mecep.org
About PIBCA — The Portland Independent Business and Community Alliance, which runs the Portland Buy Local campaign, is a five-year-old nonprofit organization with a membership of over 370 local, independent businesses. www.portlandbuylocal.org
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