Why Buy Local?

The mentality behind buying items locally versus the internet or corporate chain stores like Walmart has always fascinated me.  I remember my dad always driving his gas sucking pickup across town to go to the gas station that was more expensive, but was owned locally to fuel up his truck. I would ask him why he did that and he always responded with, "I like to help out the local businesses in town".  That was the only reason I ever got from him and it still always left me curious on why the heck he would spend more money and go out of his way for a local business?!! What's in it for him?

I also began to see signs of this mentality when I started working at a local quilting store.  Customers would come into the store and ask for off the wall items that a store like ours would never stock.  I would always direct these customers to a website or even Joann's Fabrics and more often than not they would come back with the response that they would rather not go to those places and wanted to get it locally.  So there we have it again...some people are willing to go out of their way and spend more money to support local businesses. So why is this? Is it something people do to make them feel good about themselves or is something that is economically sound? 

After doing some further investigation, I learned about the local multiplier effect. The idea in summary is how the more money one spends locally, the more money will be reinvested into the local economy. Think about it...if you spend money at a local store, that local business will use that money to pay their local employees and hire local service providers like accountants, etc.  These employees and service providers are the people who shop in the community and if they spend their money locally the cycle will continue, but if they don't shop locally the cycle will slow and negatively effect the local economy.  Let's say consumers decide to shop at Walmart instead of a local store.  The money that would have gone into local service providers is now being sent to Walmart headquarters where CEO's and other's salaries are being extracted.  That money is not going back to the community in which it came from, and instead is going to fund the Walton family bunker. (The video below is clip of a video my teacher in high school showed his class. Pretty enlightening even if it is 10 year old data.)   You can see more graphs about shopping locally in the graphs above. 

So not only does shopping locally give you a warm fuzzy feeling inside, it also boosts your local economy! So maybe my dad and the quilt store customers are on to something here....there are some major benefits to buying locally. This is something I am going to keep in mind the next time I decide to go shopping at a store. I need to ask myself...where is my money really going?