In a study comparing the economic impact of ten Andersonville businesses and their chain competitors, it was found that:
Locally-owned businesses generate a substantial Local Premium in enhanced economic impact.
- For every $100 in consumer spending with a local firm, $68 remains in the Chicago economy.
- For every $100 in consumer spending with a chain firm, $43 remains in the Chicago economy.
- For every square foot occupied by a local firm, local economic impact is $179.
- For every square foot occupied by a chain firm, local economic impact is $105.
Consumers surveyed on the streets of Andersonville strongly prefer the neighborhood over agglomerations of common chain stores.
- Over 70% prefer to patronize locally-owned businesses.
- Over 80% prefer traditional urban business districts.
- Over 10% of respondents reside outside the City of Chicago.
The study points to clear policy implications.
- Local merchants generate substantially greater economic impact than chain firms.
- Replacement of local businesses with chains will reduce the overall vigor of the local economy.
- Changes in consumer spending habits can generate substantial local economic impact.
- Great care must be taken to ensure that public policy decisions do not inadvertently disadvantage locally owned businesses. Indeed, it may be in the best interests of communities to institute policies that directly protect them.
As we ponder the effect of the proposed Pineapple Square development in downtown Sarasota, we suggest that the Sarasota EDC and Chamber of Commerce look at this study. There is evidence that as chains move into an area, fewer dollars remain in the local economy. This results in a weakened local economy.
We must make sure that policy decisions do not disadvantage our locally owned businesses. We should not be giving added benefits to the Pineapple Square development such as street vacations or publicly funded parking inside the Pineapple Square building if it is likely to disadvantage local businesses either downtown or elsewhere in the city.