Civic Economics, in partnership with Independent We Stand and the North American Retail Hardware Association (NRHA), recently released the “Home Sweet Home Study.” The analysis of the economic impact of supporting independent hardware, outdoor power equipment, paint, and lumber retailers shows that purchasing through locally owned home improvement stores generates twice as much local economic activity than shopping at a chain store.
The study found that the two largest national home center chains sold more than $114 billion in goods in 2013, and, if just 10 percent of that business had gone to indies instead, local communities nationwide would have reaped the benefits of an additional $1.3 billion in economic activity. “That kind of money turns home improvement into hometown improvement,” the study stated.
“There’s no doubt that supporting local businesses is beneficial to a community,” Independent We Stand co-founder Bill Brunelle said in a statement. “Previous research has shown that independently owned businesses provide substantial, quantifiable economic benefits. Our work with NRHA has produced some exciting results, which illustrate the impact specifically within the hardware, outdoor power equipment, paint, and lumber industry. We are thrilled to share the findings of the Home Sweet Home Study and their potential impact on locally owned hardware stores.”
Home Sweet Home builds on previous Civic Economic studies that analyzed how doing business through local, independent businesses has much greater economic impact than shopping through chains.
In the Home Sweet Home Study, a hypothetical customer purchases hardware, power equipment, and building materials for a “sizeable outdoor project.” The customer plans to spend $10,000, with $4,000 spent on a wide range of hardware from a retail hardware store; $1,000 on a single, specialized power tool needed for the job; $2,000 spent on lumber and materials from a lumberyard facility; and $3,000 spent hiring a professional to complete a part of the project.
The study found:
- Purchasing $4,000 in hardware products from an independent retailer results in $1,000 in local economic activity compared to $524 in local economic activity from the same purchase at the major chains;
- Spending $1,000 on power equipment recirculates $268 into the local economy, while spending that same amount of money at a chain would recirculate $157;
- Purchasing $2,000 in building materials puts $412 back into the local economy, compared to just $193 if those materials were bought at chain stores; and
- Hiring a local contractor for $3,000 worth of work will recirculate $3,000 into the local economy, while hiring a contractor through a chain will put just $2,550 back in the community since chain stores likely receive a referral fee, “typically in the range of 15 percent,” the study notes.
Overall, at the conclusion of the project, the homeowner would have created an additional $1,250 in local economic activity simply by supporting indie retailers. However, the study stresses that if contracted installation services are excluded, the local economic advantage is 97 percent, nearly double, and that money could improve job prospects for neighbors and could end up in other local businesses.
To highlight the impact of these figures, Independent We Stand used the findings to create the Home Sweet Home Economic Impact Calculator. Website visitors who enter in their zip code into the calculator can see how much money would be returned to their community if every family in their town bought from an indie hardware store for one full year.