December 01, 2005

Local First

by Alan Beatts

Normally I try to keep the topics in the column focused on our field or on books and bookselling in general.  More importantly I try to keep away from San Francisco-centric topics.  I know that this newsletter goes out to people all over the country and beyond.  There's no need to fill your valuable reading time (there never is enough of that, at least in my world) with "local news".  That said, Borderlands is a San Francisco business and I feel we have an obligation to our home town.  So, if you don't live in or frequently visit SF and you're short on time, please feel free to skip the following.  However, though what I'm going to talk about is specifically related to SF, the essential idea applies anywhere in the United States.  For that matter, I'd bet that it applies to most of the developed world.

For years booksellers have been talking about the "evil" chain stores who are taking away their customers and forcing them out of business.  When I first got into bookselling I had no idea that such a controversy existed and I really didn't see any difference between buying books at an independent and buying them at a chain.  Once I got into the book business, I quickly found that booksellers in general were pretty rabid on this subject.  The problem was that, at bottom, all the arguments that I heard in favor of independent stores seemed to be based on a vague but very concrete conviction that indies were "better" than chains.  When such an argument comes from the owner of an indie store it lacks a certain credibility.  My attitude, despite owning a bookstore, was, "Let people decide for themselves.  If chain stores do a better job of giving people what they want, good for the chains.  If Borderlands fails I guess I'll go open a woodworking shop."

But, in the last year or so, my opinion has changed and that change has nothing to do with my store or even bookselling in general.

I love my city.  Rightly or wrongly, there are very few other places in the world I would chose to live.  And even if I didn't love SF, it's where I'm living and simple self interest should motivate me to try to make it a nice place to live.  One of the most important things for any community's health and success is, ugly but true, a reasonable amount of money moving around.  It doesn't have to be a lot of money but there needs to be a fair amount, especially for a city like SF.  There has to be a repeating cycle in which Joe buys bread from Sam's store, Sam pays Mary to work at his store, Mary goes out for dinner at Susan's restaurant, and Susan spends some of her profits paying the rent on her apartment, which is owned by Joe.

Needless to say this is a ridiculously simple example but it does get the point across.  Add to that picture the city taking a bit of money out of most of those exchanges in the form of taxes.  The money the city grabs is spent on making sure the streets don't fall apart and that something resembling drinkable water comes out of Susan's taps when she turns them on.  Of course the city also wastes a ton of money on things like palm trees (a pet peeve of mine), but you get the idea.

But what happens if the person who owns Susan's apartment building lives in Los Angeles?  They don't take their money to Sam's store to buy bread.  They take it to the gal who owns a store in LA.  That money is now supporting the people who live in LA -- not San Francisco.  Granted, it's a tiny amount of money but when scenarios like that happen over and over again, multiple times a day, it can add up to a hell of a lot of cash.

Recently there have been a number of independent studies in various cities in the US investigating the difference between the effect locally owned stores and chain stores have on the economy of the communities where they are located.  One would expect that more of the money spent at local stores would remain in the community (obviously some money has to leave the community to pay for goods manufactured elsewhere).  What surprised me was the degree of difference.  I won't bore you with all the numbers but look at this -

In Maine a study found that local stores returned $44.60 of every $100 in sales to the local area in the form of wages, taxes, and profits.  Chains, on the other hand, returned $14.10 out of every $100. (see note 1)

In Andersonville (part of the Chicago metro area) similar figures were $68 out of $100 for locals versus $43 out of $100 for chains.  (see note 2)

And in Austin, Texas, a bookstore-specific study revealed that the local store returned $45 per $100 whereas the chain returned $13 per $100. (see note 3)

I was pretty surprised by these figures and others that I've seen.  What it means to me is -- forget about the whole "chain stores bad,  Indies good" argument -- if I spend money at a locally owned business anywhere from one and a half to three times more of that money will stay in my community.  That money will be here, in SF, where it will help my friends make rent, keep my favorite restaurant or bar open, and maybe, just maybe, give the city enough tax money to fix that huge pothole on my way home from work.

The alternative is spending it at a chain store where a good chunk of my money will go places like Rogers, Arkansas (headquarters of WalMart), which, though a pretty town, is not where I (or anyone I know) lives.

Before I let you go (assuming you made it this far -- thanks for the patience), there is a specific point to all this.  Very recently Borderlands became a member of the San Francisco Locally Owned Merchants Alliance (yup, another unpronounceable acronym -- SFLOMA.  "sif-loma"?) ( ).  It may come as a shock to those of you who know me but I'm not a big "joiner".  However, SFLOMA is very different from most business associations.  Its specific purpose is to support and promote locally owned businesses in the interest of creating and sustaining vibrant local economies.  The whole basis for the organization is the thesis that I just presented -- you and your community will benefit if you support locally owned businesses.  There are also a host of other reasons to shop locally that you can find on their (still under construction) web site.  There is also a nice article at SF Gate about what they're doing ( ).

So, please tell your friends, family, co-workers, and strangers on the street -- shop locally, it's like money in your pocket.  And look for stores showing the SFLOMA membership sticker in the windows.  But most of all -- have a wonderful, peaceful and happy holiday season.

Note 1 - The Economic Impact of Locally Owned Businesses vs. Chains: A Case Study in Midcoast Maine - September 2003  By Institute for Local Self-Reliance ( )

Note 2 - Andersonville Study  By Civic Economics ( )

Note 3 - Economic Impact Analysis: Local Merchants vs. Chain Retailers - December 2002  By Civic Economics, Austin IBA ( )

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