Local small-business owners hope trend of shopping local continues in new year

Local small-business owners hope trend of shopping local continues in new year

By Mark Collins Friday, 16 January 2009

As developments slow and Austin nears the end of a major growth spurt, it is worth asking if the shop local campaign has been successful.

“I hear lots of people coming in the store and talking about shopping local,” said Jennifer Hendrix, manager of Sparks Cards and Gifts on Sixth Street. “If we don’t have something, shoppers will ask me to recommend another locally owned store. It seems like people are making a concerted effort to stay local.”

Raising awareness of the benefits of shopping local is a primary objective of the Austin Independent Business Alliance.

“It is easy for local businesses to sometimes feel forgotten,” said Dean Lofton, AIBA director. “When people make any kind of purchase, we want them to at least consider buying local before heading to a chain.”

Small-business owners agree that shoppers have taken notice.

“When I talk to people in the community, there is a total awareness of shopping local, almost like people didn’t know it was there before,” Sew Much More employee Mary Kay Schwartz said. “We understand that if we buy local we benefit ourselves as residents and as business owners.”

The converse reaction from corporate retailers is that traffic has not been affected. Managers at The Buckle and The Gap, both national retailers, stated they were familiar with the push to shop local but that sales in Austin stores had not decreased.

“We are aware of Austin’s push to encourage citizens to shop at locally owned stores,” said Ashley Pearce, spokeswoman for Simon Property Group. “There has not been a noticeable impact on any of our shopping malls.”

Why it matters

Groups like the Austin Independent Business Alliance and the Downtown Austin Alliance were formed in the mid-’90s as a response to Austin’s sudden growth and subsequent interest from developers.

"We wanted to make sure Austin kept its culture," Lofton said. "Shopping local keeps dollars in the local economy, gives consumers more choices and it keeps Austin from becoming Anywhere, U.S.A."

In an economic impact analysis Civic Economics performed in 2002, it was shown that for every $100 spent at a chain store there was a local economic impact of $13, whereas the same $100 spent locally returned $45 to the local economy. The study cited a locally owned merchant’s higher likelihood to keep wages, purchases and profits local as the reason for the disparity.

Local businesses also have the ancillary benefits of trying innovative ideas, DAA Associate Director Molly Alexander said.

“Small businesses are allowed to be more creative and take chances because they don’t have to go through all the corporate channels to get something approved,” Alexander said. “South Congress wasn’t what it is until small businesses came in and made it the hip place to be. Now you have the first national retailer, American Apparel, opening there last year. What’s sad is that rent costs are going up so some of the smaller guys won’t be able to stay in the place they helped create.”

What the city is doing

The City of Austin has several programs in place designed to help small businesses.

The Neighborhood Commercial Management Program is a revolving loan pool that provides gap financing for eligible business owners who want to expand their operations.

Athenian Grill owner Anil Simicia was able to acquire a $250,000 loan after the expansion of a neighboring business forced the restaurant to relocate.

"My family and I have seen our future forever changed by the opportunity the city's program offered us," said Simicia, who works alongside his mother, Aishe, and father, Ismajal, at the family restaurant. "In an already tough economy, this program offered me a solution to grow my business and contribute to this community that recognizes the importance of small businesses."

The city also recently launched the Small Business Mapping Program, which uses interactive web-based maps to display information on specific areas businesses. More than 275 locally owned businesses can be found at the site, www.explorelocalaustin.org.

Local influence

Regardless of the shop local campaign’s recent success, chains primarily fill many of the established shopping venues throughout Austin.

Although, it is through little fault of the developers. Banks are more likely to provide loans for projects that have a commitment from a national retailer, and major companies are more likely to be able to afford higher costs associated with some developments.

Craig Staley, who owns six small businesses throughout Austin including Royal Blue Grocery in the AMLI development on Third Street and Betty Sport in The Domain, said Austin has a unique climate that favors local businesses and that developers are beginning to realize that.

“We were really nervous about our first meeting with AMLI because we’re a little guy so we thought they weren’t going to care, but they loved our pitch,” Staley said. “They were really looking for local retailers.”

AMLI, a residential developer, still has space available in its Third Street development because it wants to fill the storefront with local businesses. Staley feels that this trend will continue as developers adapt to consumers’ desires.

“This is Austin; you can’t just do Gap and Banana Republic everywhere," Staley said. "You have got to talk to the local businesses or people won’t show up.”