Katy Brown Solsky’s piece for the Insider (“A campaign to support local stores,” Oct. 26) extolling the virtues of buying at locally owned stores rather than chain stores is highly misleading.
If the comparison is adjusted for the lower prices at the chain stores, the locally retained amount will be about the same. The Andersonville study Solsky cites was done by civic economics a group, which is in the business of conducting studies that seem to me to be designed to favor locally-owned businesses.
The methodology they use almost certainly understates the local impact of chain stores. Since locally retained revenues vary widely by the type of business the selection of the local businesses in the study is crucial. In the Andersonville study most of the difference comes from the service sector which essentially matches a locally owned dance studio against a chain movie theater. I am sure that the locally “owned “ Red River Theatres people will tell you that a significant chunk of revenue from a theater goes for the rental of films no matter who owns it.
I have read other civic economics studies as a follow-up to similar material published in the Hippo. Their studies essentially compare specialty stores to chain stores so in some ways. Solsky is telling us to buy an antique when we really need toothpaste. The civic economics studies are useful in the context of current debates on taxes because they show (much to my surprise) that the locally owned businesses are quite profitable.
For some products with a service component a locally-owned business with actively involved owner managers there is the potential for much better service and modification of the product line for local tastes and needs.
The service and local modification are the reason to buy locally and the way to build a vibrant downtown.
