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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.

"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.

"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."

"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.

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