Shop Local… Really Local! This is good for America.
In 1774 when American patriots stopped drinking English tea in order to stop funding the British Army, the concept of shopping local began. American patriots realized that their purchase of tea sent money and profits back to England where it could be used in the war against them. An entire tea-drinking culture stopped drinking tea and began drinking coffee instead. Coffee was not necessarily produced locally, however, but at least it was not distributed from England in support of their oppression of the new-forming democracy. The signing of the Declaration of Independence meant that we would no longer send unnecessary money over a great ocean. Our hard earned cash would remain on American soil and would become the economic fuel that built this nation.
The American Revolution brought forth a new country, and shopping local has kept that country alive. Coffee was a big part of the Revolution that created the greatest nation on Earth.
Shop Local Revolution
Shopping local has a good effect on the local economy. When you support your local businesses over the national chains, you are keeping revenue in your town. When more revenue stays in your town, more money is spent within your town. When more money is spent, more money is made. When more money is made, the businesses can hire more people, expand, build, grow, and innovate. Sound simple? Then why is everyone sending our money everywhere else but home? We are all guilty of this. But imagine if everyone changed.
A Shop Local Revolution would change America for the better. If people shopped locally, there would be more jobs and more local businesses thriving. When local businesses with local employees thrive, they hire more local people. As local businesses hire more people, they can innovate great new products too. As new products become available in the marketplace, more revenue is made and kept locally. This is how this country was built. Innovation creates jobs and products that make our lives better. Technological advances in medicine are only possible when budgets will allow for aggressive and risky research. Companies have to be willing (and financially able) to take advantage of potential future revenue streams by researching and developing better products, medicines and technologies. These revenue streams fund these projects and create new jobs.
Andersonville is a Chicago Suburb. Their Chamber of Commerce helped sponsor a study on the economic impacts of shopping local versus at a chain store. The study was conducted in 2004 and is available online at www.andersonvillestudy.com…
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 remain in the Chicago economy.
For every $100 in consumer spending with a chain firm, $43 remain 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.
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.
For every $100 in consumer spending with chain firms, $43 will remain in the local economy; if that same spending occurs with a locally-owned firm, value jumps to 58%, to $68. Similarly, for every square foot of space occupied by a chain, the local economic impact is $105; if a local firm occupies that same space, impact jumps by 70%, to $179. This Local Premium represents the quantifiable advantage to the city provided by locally-owned businesses. Whether measured as a share of revenue or by square footage, local firms generate a substantial Local Premium over their chain competitors. That means more money circulating in the local economy, which may mean more home improvement, more in the collection plate, and more in taxable transactions to fund city services.
Across the board, locally-owned businesses substantially exceed their chain competitors in all four components. For example, local firms spent an average of 28% of revenue on labor compared to 23% for chains. Additionally, eight of the ten local firms are owned by Chicago residents, so profits largely remain in the city. Local firms procure local goods and services at more than twice the rate of chains. Finally, locally-owned firms in the study contribute more to local charities and fundraisers than do their national counterparts and, although this provides the smallest local advantage of the four categories, this difference is important to the community. * Andersonvilestudy.com
The local business owner lives locally so he/she shops locally too, thus keeping the revenue locally. The chain store will send most of its revenue back to corporate HQ. The local business keeps more of its revenues locally. In my case, I use a local accountant, a local bank, and a local financial adviser. By local, I mean within the Santa Clarita Valley. I eat at local family-owned businesses like The Egg Plantation and Wolf Creek Restaurant; I also drink locally-brewed beer. I bought all my cars locally – and from American manufacturers too. I shop for clothes locally and upgrade the features of my life locally as well. I bought my boat from a local boat shop and used a local realtor to buy my local house. Most of the revenue my customers spend on my local business stays right here at home, thus stimulating our local economy.
My business buys from local suppliers whenever possible. We use a local bank, local accountant, and local vendors whenever possible. Our printer is local and our vehicles are maintained by locals as well. We use a local payroll service and a local flavor producer. Unfortunately, coffee beans are not grown locally so we have to import those from all over the globe. Our packaging is from overseas because there are no local options for that; while our cardboard is Southern California local. Some local products and services are a little bit more expensive, but well worth it. When you do business with a local firm, you keep the revenue locally. When the revenue is kept locally, this is good for you and your neighbors.
City Tax Revenue
When you shop local, tax revenue stays local. Local taxes improve your city. When your city makes more money – and has phenomenal leaders, managers and planners, like mine does – your life will get better. Roads are improved and parks are built. Police are hired and fixtures are improved. Recreation and youth sports are priorities. A strong business environment is encouraged and supported. This type of city understands that we are all in this together, and when we send our money out of the city, we cost our city much needed tax revenue.
My city, The City of Santa Clarita, California, understands the importance of shopping local. My city has a ‘Shop Local’ marketing campaign and is very aggressive in attracting outside revenue into our city. Our bureau of Movies and Television brings additional revenue into the city because of their aggressive promotion to filmmakers. Our city’s Economic Development Division has been recognized for its economic impact on residents and businesses alike. I applaud the City of Santa Clarita for making this town very ‘local’ business friendly.
Most large corporations are considered global companies. Some large businesses have outsourced millions of American jobs to factories overseas in order to save a few pennies on manufacturing costs. Global competition is so fierce that American companies have had to outsource to other countries where products and labor are less expensive in order to compete in a global market. We have all heard the stories about how a typical Toyota vehicle or Ford truck has parts and uses labor from all over the world. Shopping local has become a little confusing in that it is hard to tell the American companies from the others anymore.
Our large corporations have sold us out and sent our jobs overseas in order to gain competitive advantage and increase shareholder value. Shareholder value drives these decisions, and the stock market is the scoreboard. CEOs are hired and fired based on their ability to deliver more value to shareholders. Decisions are being made with very little consideration for their impact on local communities.
In late 2008, the stock market took a nose-dive, and a lot of attention has been placed on these large companies in the media. A lot of the biggest companies in the world and some great American icons (like Ford) are asking our government for bailout money. They blame their cash flow problems on a struggling economy. While they continue to send our jobs overseas, they ask the taxpayer to help bail them out. Big shots in $5,000 suits are running these companies and making millions of dollars, while sending American money and jobs to other countries, where they are growing and prospering as a result. American consumerism has built countries like China and Taiwan, but what are those countries buying from us to bring the jobs and revenue back?
You don’t see a whole lot of American cars driving around Europe, but I sure do see a lot of foreign cars on our roads! Due to our dependence on foreign oil, we are not only sending jobs overseas, but billions of dollars as well. We are giving our hard earned money to countries that hate us, yet welcome our capital. When oil companies raised their prices during the summer of 2008, more money left the United States than at any time in our history. People were spending $50-$100 more a week on gasoline alone. Companies began raising prices to offset the distribution costs associated with higher fuel prices; and more money went out of local economies and into foreign hands.
President Barack Obama is encouraging the businesses and citizens of this country to embrace new and alternative energy sources for the future. He wants America to start moving away from its dependence on foreign oil. This is a good thing and I wish him luck. I am sure the largest businesses in this country will be concerned about how these different alternatives will affect their shareholder value, and will probably complain that a move like this will be tough on their businesses. I hope that President Obama takes a strong stand like he promised. I hope he goes after these guys so that we can exchange the corporate greed with corporate responsibility. It is going to take all of us, large and small, to pull ourselves out of this economic mess.
Environmental VS. Economic impact
Consumers have a responsibility too. Globalization has brought us huge convenience. Today, it is easy to find just about anything and everything at your local Wal-Mart store or any number of merchants. Prices have come down so much due to unfair foreign labor practices, and consumers are buying foreign-made products at lower prices. How can the same item that is made in the United States cost more than an item made overseas and shipped here? It is mostly because of things like sweatshops and low labor costs that allow this phenomenon to happen. Consumers need to look at product labels more carefully and take responsibility. This was encouraged at President Obama’s inauguration and he is asking for all of us to help in this time of crisis.
Saving a few cents on a product from another state or another country does nothing for your local community. Buying a brand because it’s cool or popular is doing nothing for your local community. I’ll be the first to admit that I’m guilty of this. I tell my wife to shop at Wal-Mart because she will save at least 30% on everything she buys. This just makes good business sense. I also know that grocery stores mark-up their products so much that they lose their competitive edge as well.
Why should I pay 30-40% more at a grocery store for the exact same items? Who is pocketing the extra cash? I figure that if Wal-Mart has figured out a way to get products through their supply chain and to the end consumer less expensively, passing that savings onto the consumer, that is just good business. If, from a small town in rural Arkansas, a great American hero like Sam Walton can figure out how to do it better, then why can’t the rest of them? His business model worked so well that his Wal-Mart stores became the largest retailer in the world.
When I asked the Wal-Mart national coffee buyer why the store never marks their products up as much as their competitors, I was told that they were “advocates for the consumer.” Less is more in Wal-Mart’s case and consumers respond to Wal-Mart’s mission. Four out of five American consumers shop at a Wal-Mart each week. (The Wal-Mart Way.) Wal-Mart brings additional tax revenue to cities; it also brings billions of dollars right back to American consumers in the form of savings. Over a year, we save quite a lot of money by shopping at Wal-Mart…and the money we save stays in the local community!
We have control in the aisles of Wal-Mart because we make the choices in regards to what makes it into out cart and what does not. We usually end up buying items that we don’t even really need – just because they are on an end-cap and are so inexpensive. I don’t know how many times I have gone to the Santa Clarita Wal-Mart Supercenter for just the necessities like milk, eggs, and bread; but then I end up walking away with so many things I just couldn’t say “no” to, because they were so inexpensive. My wife doesn’t let me shop with her at Wal-Mart anymore as she has much more self-control than I do.
Unions, CEO Bonuses, Corporate Jets…
In my opinion, it appears to be hard for retailers who have union employees to compete against retailers who do not. There is a distinct advantage to the business that does not use unions; it’s that their cost to do business is usually lower, therefore making them more competitive in the marketplace. I do not know enough about unions to really comment. But I do know that in this day and age, corporations are hard to trust, and unions keep them honest and fair. My dad was a union employee with United Auto Workers and the local Teamsters Union, but I do not have any personal experience with them. I think unions may have served a great role a long time ago, and still do, but they might have partially contributed to the decline of the competitiveness between large American companies in the global marketplace. It is partially because of unions that most of our products are more expensive than the same item traveling thousands of miles from faraway lands.
I support unions, whereas managers or organizations wish to take advantage of them. Greedy managers need to pay fair wages and the unions keep it fair. I would rather put the blame on hundred million dollar advertising campaigns and CEO bonuses. Why should I buy a product for 30% more to support higher CEO bonuses, $600,000,000 advertising campaigns, and corporate jets, when I can get the same thing for a fraction of the cost? We have supported our neighbors across the globe, building up their economies in the process. Now it is time to cut the umbilical cord of American consumerism. It might be time for us to look to support our own again. We all have to do our part. This includes the unions, the CEOs, the government (local, state, and federal), and consumers alike.
American consumers are smart, well-educated people. We know what we want and we know where to get it or find it. We are savvy shoppers and we use the internet along with many other methods (like word of mouth, advertising, free trial, and references from friends). We don’t always shop for price, and we expect super-duper good service or else forget it. Service didn’t exist when I lived in France, and it is an American competitive advantage that we consumers have gotten used to. If we are not treated like kings and queens, no matter where we are spending our hard earned money, we will have a fit or never come back. We will most likely tell all of our friends on Facebook too.
The world dreads American tourists. We have a reputation for being spoiled and a little arrogant. I say, who cares? We are Americans. What’s wrong with walking around with a little pride in our step? The French are not the warmest creatures on the planet either. Believe me, I have lived with them; this applies especially to the Parisians.
We all have our quirks; ours just happens to be consumer entitlement. We feel like we deserve it, simply because…we deserve it. We have been told over and over that we deserve to be treated like kings via the constant advertising messages we are hammered with every second of every day. If our dentist makes our teeth hurt, we look for someone else. If our gym trainer works us too hard, we fire him/her for a better one. If we buy a product and it isn’t perfect, we return it and demand a refund. If our steak is too well-done, we ask the waiter to get us another one.
Are we serious, folks? There are starving children out there and we are returning over-cooked steaks? It is enough to make the whole world sick. This economic crisis is certainly a bad global headache that spoiled American consumers helped to create.
Last year, Wal-Mart Stores asked its vendors to report on their products’ carbon footprint, which measures the amount of natural fuels and carbon emissions utilized in the manufacturing and distribution of goods and services across the globe. If I buy a tomato from a local farmers’ market, the tomato traveled only a few miles to its end destination; thus having a very small carbon footprint. A tomato from a grocery store will have traveled from Brazil and went through the port of Miami, only to travel by truck or train to the West Coast, where it finally reaches its end destination. That tomato from Brazil has a much larger carbon footprint; its impact on the environment is much greater.
I was very impressed with the Wal-Mart initiative and respected their global leadership in the war on global warming. Wal-Mart has tens of thousands of suppliers worldwide and their leadership can have far-reaching positive impact on our planet. I applaud Wal-Mart for doing their part; however, there are a lot of products still in their stores that need to be replaced with American-made products. The sooner, the better; that’s the way I see it. How convenient is it to get your produce from your favorite grocery store? It is very convenient. If your city or town has a local farmers’ market, I would encourage you to support it. The produce is better than anything in any grocery store that has traveled for days to get there. The produce is better-tasting and usually less expensive; and the revenue stays local. It is a great way to do your part and help the economy as well as the environment. Avoid the convenience trap. You could literally live in a Wal-Mart Super Center, but they are not the end-all decision makers as to what Americans should buy.
Your life will be pretty generic if Wal-Mart is the only place you shop, and chances are, four out of five of you shop there every week. If you’re a supplier, Wal-Mart buyers are like Gods; but that doesn’t mean their decisions should shape the way America consumes. We are the consumers and the consumers are King. Kings tell others what to do, not vice-versa, so buy items in their stores that are environmentally and economically responsible; and do not buy the ones that aren’t. You are in control and your buying decisions add up. Buyers care about numbers, and when sales are low, items get the boot. Help give irresponsible items the boot by not buying them. Do your part! I say, mix it up. Support a local boutique. Your local pharmacy. Your local video store (if there are any left). Or even your local coffee roaster, if you have one. (And if you don’t, I can recommend a good one!) Drive the extra mile and support a local merchant today!
Competition Breeds Innovation
Everyone knows that if you play against better players, you will get better. In basketball, when I played against my older brother or my dad, and got my butt kicked, I was slowly getting better. I started finding ways to succeed. Instead of every shot being blocked, now a few made it past their long arms. Then I incorporated a pump fake…and it was on! I had them in the air like popcorn in a pan, which paved the way toward a clear lane to the hoop. They usually blocked my lay-ups with their long arms and quick recovery, so I figured out how to use the rim as protection and developed a reverse lay-up.
Eventually I was dunking on my dad while he was fouling the heck out of me, and I went on to do the same to big-time centers across the United States. The time I was getting my ass handed to me by my dad and my brother, I was developing new skills. I found ways to succeed. The very competition that frustrated me actually made me better.
Making Our Lives Better
A small competitor has to think hard about how to beat a much larger opponent. Large Companies innovate in order to remain market leaders. To become complacent is to die. When companies fail to adapt to changing market conditions, their market share can decline. The basic idea behind capitalism is that the better mousetrap would be the preferred mousetrap, thus everyone would thrive to have the best darn mousetrap in the world.
In the field of medicine, this is a real good thing; cures are found and medicines are developed, which all make our lives better. In the field of technology, there are technological breakthroughs and advancements all the time. Each one either threatens our very existence, like the innovations developed during the cold war, or improves our lives by making our everyday functions easier. Products are developed to improve our environment. As I mentioned earlier, President Obama is calling upon businesses to research and develop alternative sources of energy. It is in our best interests to develop new energy sources that will make our lives better.
At Newhall Coffee, whether it is blending better beans or trying new flavors, we are constantly looking at product development in order to differentiate and remain relevant in the marketplace. We have researched and developed several new items, which we will launch in 2009.
Stop Getting Dunked On!
Just like in sports, competition breeds innovation. Coaches develop better game plans and players develop better skills. The game evolves over the years until you end up with super humans like Lebron James and Kobe Bryant, who make everyone better. I relate those athletes to the best in coffee, Starbucks. Starbucks has made coffee better! Roasters create better coffee as a result of great coffee from Starbucks. Their success breeds our success. Even though they are dunking on you now, and getting all the endorsements, you are going to do something different the next time Lebron is driving down the lane right toward you with blood in his eyes. You have a decision to make at this critical moment. Do you try to block his tomahawk dunk or do you get the hell out of his way? Do you risk embarrassment by getting dunked on again, or do you stare down the greatest athlete in the world and challenge him at the rack?
I hope your answer is to challenge him at the rack, because that is what you must do! You are on national TV and your mom is watching from home. Your girlfriend is in the crowd, her hand on her cell phone, ready to text all her friends about tonight’s outcome. Before this game, you had been to the gym, watching videotape of his play to prepare yourself. You know that when he jumps, you will lose. Your head will spin as he hammers the ball through the rim and into your face. So instead of becoming a poster boy, again, you do something that takes balls. You actually rush towards Lebron and plant your feet just as he is about to lift off…
All his strength and power are headed your way. You can smell the PowerAde on his breath as he raises the ball in the air for his infamous tomahawk dunk. You prepare for and thoroughly expect the impact to be the force of a Mac truck. At this moment, no one blames you when you close your eyes as he smashes into you like a hurricane. At the moment of truth, when all eyes are on Lebron, all you can think about is the plan. Will it work?
You knew, going in, that you were taking a big chance and that the risks were high. You are understandably having a few doubts right about now, as the flashes of photographers opens your eyes in time to see a huge number 23 in your face and – BAM! You fly backwards and crash into the cheerleaders sitting in the front row. You think you hear a whistle, so you look up with hope in your eyes as a cheerleader gently pushes you off her lap. All you see is a very upset-looking Lebron James a few feet away. Then you see the referee put his hand behind his head, signifying an Offensive Charge. The crowd roars to its feet.
Your plan paid off. The risk justified the reward and you beat the giant… this time. Lebron didn’t respect you. In fact, he just tried to embarrass you in front of your mom and your girlfriend. He looked beyond you and underestimated the threat your skinny little frame posed. He was wrong.
I doubt Starbucks even knows my name. They certainly don’t respect a skinny little micro-raster like me, and they enjoy embarrassing me whenever they can. They are just doing what they do best, and so was Lebron when he was dunking on you. Pick yourself up off the ground and find a way to beat the giants in your life. If they can jump higher than you, please don’t get into a jumping match; you will get dunked on every time. Use your strengths, and know their weaknesses. Even the great giant Goliath had a weakness, and a little boy named David found it and defeated him with a smooth stone.
You improved your game and your hard work paid off. As you are getting off the cheerleader’s lap, she hands you a little note with her cell number on it and smiles at you. Then you wake up and you realize your dream was about becoming better and taking chances. You grab a cup of coffee, take a cold shower, and decide that today is going to be a little different. Today, you will look at challenges a little differently. You might even take a chance or two. Who knows, you might even get knocked down by a giant, and still end up with the girl!
You will never know unless you take that chance. Take on the giant! When preparation meets opportunity, we are the luckiest. When your business is challenged as mine is daily, it is time to find a way to succeed. If you are getting beat to the left, then make them go to their right. Use your strengths and know their weaknesses. Look them in the eye and compete!