Survey Finds Independent Businesses Benefit from "Buy Local First" Campaigns, But Still Face Looming Challenges

An annual survey has found that independent businesses experienced solid revenue growth in 2012, buoyed in part by "buy local first" initiatives and growing public interest in supporting locally owned businesses.

But the survey also documented significant challenges facing independent businesses, most notably an increase in "showrooming" and competition from online retailers, tax and subsidy policies that favor their big competitors, difficulty obtaining loans, and a customer base still reeling from the recession.

The 2013 Independent Business Survey, which was conducted by the Institute for Local Self-Reliance in partnership with several business associations, gathered data from 2,377 independent businesses across 50 states and the District of Columbia. Among its findings:

• Survey respondents reported revenue growth of 6.8% on average. More than two-thirds experienced revenue growth in 2012 -- a larger share than in our 2011 and 2010 surveys.
• Independent businesses in communities with an active "buy local first" initiative run by a local business organization reported average revenue growth of 8.6% in 2012, compared to 3.4% for those in areas without such an initiative.
• Among survey respondents in cities with a "buy local first" initiative, 75% reported that the initiative had had a positive impact on their business.
• "Showrooming" -- i.e., customers examining products and seeking information in local stores and then buying online -- was identified by independent retailers as one of their biggest challenges. More than 80% said showrooming was affecting their business, with 47% describing the impact as "moderate" or "significant."
• Lack of financing was another top challenge, with 23% businesses surveyed reporting that they had been unable to secure a needed bank loan for their business in the last two years.

Download the 2013 Independent Business Survey. View the findings of previous surveys conducted over the last five years here.

"Independent businesses are making huge strides when it comes to communicating their value and building community support, but they are still struggling in an environment in which public policy often gives major advantages to their big competitors," said Stacy Mitchell, Senior Researcher with the Institute for Local Self-Reliance.

"This study -- and the outstanding results of the Small Business Saturday last November -- make clear that we have reached an important tipping point, as shoppers are showing through both their purchases and their direct feedback to indie businesses that they value the diversity, creativity, and unique services of their hometown businesses," said American Booksellers Association CEO Oren Teicher. "For indie businesses in communities that don't yet have a local business alliance, the time to realize the potential of working together is now."

"These findings show the value of collaboration among local businesses, from improving sales and community support to fostering creativity and shared action in addressing the challenges facing independent entrepreneurs," said Alissa Barron-Menza, Managing Director of the Business Alliance for Local Living Economies.

"This data supports what we are hearing from our local groups -- that their work is influencing people's choices and driving more business to local independents," said Jeff Milchen, Co-Director of the American Independent Business Alliance.

"As this survey shows, public awareness of the benefits of independent businesses is growing, but there are new challenges," said Kathleen McHugh, President of the American Specialty Toy Retailing Association. "Showrooming is the number one issue facing toy stores today. If consumers value that store visit and the investment local retailers make in their community, they should also want to keep those brick-and-mortar stores in business by making their purchases with them."

"TriMega, and our independent office supply dealer members, are very encouraged by the growing impact of buy local first initiatives. We believe that ongoing education to consumers on the benefits of supporting local businesses - such as keeping dollars in the community - is gaining traction and driving positive sales results in today's economy," said Michael Morris, Vice President of Marketing for TriMega Purchasing Association.

"ILSR's survey demonstrates that active 'buy local' initiatives are not just feel good marketing campaigns, but can in fact build a small businesses bottom line," said Bill Brunelle, co-founder of Independent We Stand.

ADDITIONAL CONTACTS:
Dan Cullen, American Booksellers Association, 914-406-7560
Jeff Milchen, American Independent Business Alliance, 406-582-1255
Katheleen McHugh, American Specialty Toy Retailing Association, 312-222-0984
Alissa Barron-Menza, Business Alliance for Local Living Economies, 360-746-0840 x109
Parker Karnan, Independent Running Retailers Association, 206-601-7019
Corinne Shindelar, Independent Natural Food Retailers Association, 612-724-1530 x 102
Kate Lewis, Independent We Stand, 757-340-7425.
Fred Clements, National Bicycle Dealers Association, 949-722-6909
Michael Morris, TriMega, 847-961-3118