The “buy local” movement, and an increasing awareness of supporting local economies helped boost sales growth for independent businesses in 2014, but they still face Internet retailers, big-box chains, and other challenges.
These are a few of the findings in the 2015 Independent Business Survey, conducted by the Institute for Self-Reliance, in partnership with the Advocates for Independent Business. The study, released in February, surveyed more than 3,000 locally owned businesses across the U.S. The good news: independent business’s revenue grew an average of 8.1% in 2014, an increase of the 5.3% reported in 2013. About half of the sample were independent retailers whose revenue increased 5.1% in 2014, after a 2.3% increase in 2013. Holiday sales were healthy as well; local retailers reported an increase of 4.8%, which was ahead of the growth performance of many national chains as well as the 0.9% overall decline in December retail sales reported by the U.S. Department
“Buy local” campaigns do appear to make a difference. Businesses in towns that had such initiatives reported a 9.3% sales increase, compared to 4.9 percent in towns that didn’t. Almost half of respondents—49%—said that such campaigns had brought new customers to their business; 51% said that the campaigns improved the loyalty of existing customers, and 46% said that the campaign led to more collaboration and mutual support among local businesses.
The top challenges? Competition from Internet retailers, better pricing and terms for bigger competitors, competition from large brick-and-mortar chains, and costly health insurance benefits.
You can see a complete summary of the survey results at bit.ly/1AobG2R.