December 15, 2014

The Case for Buying Local

With ten days left until Christmas and people scrambling to do their Christmas shopping, it’s time to discuss a different way of getting involved, and that involves your purchasing habits. Sure, price can play a significant role (especially for those with lower incomes), but there are other forms of decision criteria that have social, political, and environmental implications. Fair trade! Non factory farmed meat! Buy green! Boycott this company! But if there is one rule I encourage over all others, it’s to support local businesses.

Sure, buying local may mean paying a higher price than at big box stores, but there are other implications that need to be considered.

1. Wages – Employees working at big box stores and restaurants are more likely to be paid the minimum wage than smaller local businesses. Sure, there are exceptions such as Costco paying their employees an average of $21 per hour[1] and many smaller businesses struggle to pay employees living wages, but the biggest opponents to raising the minimum wage are large corporations like Walmart and McDonald’s. Those two companies (among others) have been targeted in campaigns such as Fight For 15 in the United States and the $14 Now campaign in Ontario.[2]

While the minimum wage debate could use a separate post altogether, the most common argument for raising the wage is extra money earned will be spent back into the economy, which in turn leads to local businesses needing to hire new employees. Higher prices and/or unemployment are common arguments against, though both have been debunked before.


2. Quality of Service – At local businesses, employees and business owners are more likely to have extensive knowledge of the products they sell and service, as well as take the time to help you select the right product and fit. This extra attention will often lead the customer to be satisfied, which in turn leads to the customer referring the business to others and the establishment of positive business relationships.

Big box retailers, on the other hand, usually have higher employee turnover and are not as knowledgeable about specific products. In extreme cases, products assembled at certain big box retailers do not even meet basic safety tests as per this news story on bicycles by WKMG Local 6 in Orlando, Florida.

Community Bicycle Network - Not-for-profit bike parts & repair shop

3. Transportation – There are two transportation costs associated with commerce, the first of which has to do with how the customer gets to the store. In the case of local businesses, studies such as the Toronto Cycling Think & Do Tank cited Downtown Toronto businesses will have 10-20% of its customers arrive by car. Big box stores, on the other hand, are more likely to be found on the edges of cities and suburban areas where land is cheaper, which renders them virtually inaccessible by anything other than a car and in turn, increases transportation costs.

The supply chain cost of transportation has to do with where the products are sourced. For farmers markets and co-ops like Toronto’s West End Food Co-op, they prioritize the selling of locally grown food (e.g. less than 100 kilometres away) to reduce shipping costs, whereas a supermarket sells foods produced thousands of kilometres away. (e.g. fish from China, tomatoes from USA or Mexico, bananas from Colombia, etc.)

Fresh bread & produce from St. Lawrence Market

4. Externalized Costs – Annie Leonard, who produced the Story of Stuff in 2007, used this term to describe costs companies pass on to others. These include environmental costs associated with air and water pollution, health costs related to toxic chemicals and obesity (in the case of fast food), and social costs such as increased government welfare from paying low wages. Certain companies use “planned obsolescence” to force customers to regularly buy new, which leads to an unnecessary waste in resources. In response, there are ethically minded products such as fair trade for foreign goods, cosmetics not tested on animals, organic food produced without pesticides, and clothing not made in sweat shops. By buying local, many of these externalized costs can be reduced for reasons discussed earlier.



For this Christmas season, I sought to make purchases from local vendors whenever possible and suggest you do as well. It may not be as cheap as big box stores, but you will get a higher quality experience and will be doing your part in strengthening your community.

Merry Christmas!
Rob Z (e-mail)

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[1] Melissa Campeau. Financial Post. “A stick and a carrot at the same time: Why Costco pays twice the market rate.” October 30, 2014. http://business.financialpost.com/2014/10/30/a-stick-and-a-carrot-at-the-same-time-why-costco-pays-twice-the-market-rate/
[2] Armine Yalnizyan. The Globe and Mail. “Why the minimum wage debate isn’t going to go away.” February 5, 2014. http://www.theglobeandmail.com/report-on-business/economy/economy-lab/why-the-minimum-wage-debate-isnt-going-to-go-away/article16710873/

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