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

By Amy Livingston Date October 12, 2021

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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. And the coronavirus pandemic of 2020 and 2021 has made things worse, as many small business owners were forced to shut their doors or move their businesses online. 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:
Motley Fool Stock Advisor recommendations have an average return of 397%. For $79 (or just $1.52 per week), join more than 1 million members and don't miss their upcoming stock picks. 30 day money-back guarantee. Sign Up Now 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. The Institute for Local Self-Reliance (ISLR), a community development organization, points to numerous studies that show more than half of each dollar spent in a local store returns to 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. According to the studies on the ILSR’s list, when people buy from local small businesses, their spending creates around twice as many local jobs as money spent at big chain stores.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 lots of occupied storefronts 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, bars, or coffee shops, 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.

1 Learn About Local Businesses

To learn more about the small-business community 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, try searching online. American Express has a site that displays maps of local businesses nearby, or you can check out maps on sites like Google and Yelp. Be careful, 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, my trusted local mechanic consistently gives me much better service at a lower price than the car dealership.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 their favorite 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 increased nearly fivefold between 1994 and 2015, so your chances of finding a market in your area are better than ever. So are your options for paying. Currently, more than half the counties in the U.S. have at least one farmers market that takes credit cards, and one-third of counties have a market that accepts SNAP benefits. 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 three out of four farmers who sell their goods at farmers markets say they 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 farmers market shoppers say they typically have 15 to 20 social interactions during each visit as compared to just one or two when they shopp 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.

4 Bank Locally

Another way to keep your money in your community is to literally keep your money at a local community bank or credit union rather than a large national bank. Banking locally offers several benefits: Lower Cost. Many locally owned banks and credit unions offer the same services as the big national banks, such as credit cards and online bill payment. However, their rates and fees are typically quite a bit better. According to the 2020 Banking Landscape Report from Wallethub, checking accounts from community banks are 81% cheaper than those from national banks, pay 37% as much interest, and have 94% more features. Their banking fees are even 39% cheaper than those at online banks, the next cheapest option.Better Service. Community banks and credit unions offer more personal service because they serve a much smaller area. At a community bank or credit union, the teller will often recognize you, remember your name, and take time to answer your questions. Community banks and credit unions don’t always offer the 24-hour phone service you get from the big banks. But anyone who’s ever spent time trying to navigate the menu on a national bank’s phone lines and connect to a human being knows that isn’t much of a drawback.Supporting the Local Economy. Community banks and credit unions make most of their money from loans to local people and businesses. The ILSR reports that more than half of all loans to small businesses come from small to mid-size banks and credit unions. Because small local banks make most of their loans within the community, they have an interest in helping that community prosper.

Final Word

When you invest money in your local economy, you’re not just helping local business owners — you’re also helping yourself. You’re making your town a better place to live in, with a rich character, thriving economy, and tightly knit community. And the more local businesses prosper, the more new ones will open, making it even easier to continue shopping locally in the future. Shopping Lifestyle TwitterFacebookPinterestLinkedInEmail

Amy Livingston

Amy Livingston is a freelance writer who can actually answer yes to the question, "And from that you make a living?" She has written about personal finance and shopping strategies for a variety of publications, including ConsumerSearch.com, ShopSmart.com, and the Dollar Stretcher newsletter. She also maintains a personal blog, Ecofrugal Living, on ways to save money and live green at the same time.

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