fflint
05-04-2007, 01:35 AM
Local merchants reinvest in city, their study says
Retail federation spokesman skeptical of survey's claims
Ilana DeBare, Chronicle Staff Writer
Thursday, May 3, 2007
http://sfgate.com/c/pictures/2007/05/03/bu_depotb23apr02.jpg
Cole Hardware owner Rick Karp, shown from 2002, says the study backs up his beliefs about local merchants generating more local jobs than chains
http://sfgate.com/c/pictures/2007/05/03/bu_economic_impact.jpg
While chains and big-box stores spread throughout the country, San Francisco remains a stronghold of locally owned retail businesses.
And these local stores and eating places recycle much more of their revenue in the surrounding community than do their chain competitors, according to a new study by a San Francisco merchants' group.
The study was financed by the San Francisco Local Merchants Alliance, a group of more than 100 retailers who hope to use the information to win customers away from the chains.
It estimated the economic impact of locally owned businesses in the city's bookstore, toy store, sporting goods and limited-service restaurant sectors. It found independent local businesses maintaining a strong chunk of the market in each of those sectors.
For instance, locally owned bookstores garnered an estimated 55.4 percent of all book-selling revenues in San Francisco and the neighboring cities of Daly City, Colma and South San Francisco in 2005.
That's far more than nationally, where independent bookstores are responsible for about 10 percent of book sales.
Locally owned sporting goods stores held an estimated 56.2 percent of their market, while local toy stores were responsible for 44.4 percent of toy sales.
Meanwhile, locally owned cafes and sandwich shops took in 63.9 percent of San Franciscans' spending at restaurants without waiters or waitresses. Chains such as McDonald's, Starbucks and Subway had 36.1 percent of the market.
"To get well over half the market versus chain stores is really unusual," said Dan Houston, a consultant with Civic Economics in Austin, Texas, who co-authored the report. "I live in Texas and it is not possible that could be the case down here."
The study also attempted to quantify the ripple effect of local retailers and their chain competition on the San Francisco economy.
It concluded that local stores and restaurants return much more money to the surrounding community, since they tend to buy their supplies and services locally.
For instance, locally owned bookstores create an estimated 2.14 local jobs -- both directly through their own hiring and indirectly through hiring by their vendors and service providers -- for every million dollars of books sold.
Chain stores create fewer, according to the study -- just 1.27 local jobs for every million dollars of sales. And most Internet stores such as Amazon create no local jobs because their headquarters and warehouses are out of town.
"What was most illuminating to me were the job generation numbers," said Rick Karp, owner of Cole Hardware and a member of the Local Merchants Alliance. "I've always made that case but never honestly knew the statistics behind it. This shows that what we've been stating all these years is quantifiably true."
The study did not address pricing differences between chain stores and local merchants or how the cheaper prices common to big-box stores might benefit consumers and the local economy.
And a spokesman for the National Retail Federation said the study should be viewed skeptically as a political document.
The local merchants "are going to look for metrics that bolster their argument against larger competition," said Daniel Butler, vice president of the federation, which is the world's largest retail association. "It sounds like they are looking for ways to control zoning and keep other companies from coming in to the market."
The merchants acknowledged they see the study as a competitive weapon. But their focus is less on using the data to win zoning battles than on using it to influence consumers.
They're hoping that San Franciscans will think about the local economic impact when they make shopping decisions. And they're asking residents to shift 10 percent of their spending away from chain and Internet stores to local retailers.
Shifting 10 percent of all retail spending would create a net gain of 1,295 jobs and $191 million in local economic activity, according to the study.
"We're not asking people to boycott the chains, just to shift some of their spending," said Hut Landon, executive director of the Locally Owned Merchants Alliance. "Say you buy 10 books, and four or five of them usually come from independent booksellers? Buy six."
Retail federation spokesman skeptical of survey's claims
Ilana DeBare, Chronicle Staff Writer
Thursday, May 3, 2007
http://sfgate.com/c/pictures/2007/05/03/bu_depotb23apr02.jpg
Cole Hardware owner Rick Karp, shown from 2002, says the study backs up his beliefs about local merchants generating more local jobs than chains
http://sfgate.com/c/pictures/2007/05/03/bu_economic_impact.jpg
While chains and big-box stores spread throughout the country, San Francisco remains a stronghold of locally owned retail businesses.
And these local stores and eating places recycle much more of their revenue in the surrounding community than do their chain competitors, according to a new study by a San Francisco merchants' group.
The study was financed by the San Francisco Local Merchants Alliance, a group of more than 100 retailers who hope to use the information to win customers away from the chains.
It estimated the economic impact of locally owned businesses in the city's bookstore, toy store, sporting goods and limited-service restaurant sectors. It found independent local businesses maintaining a strong chunk of the market in each of those sectors.
For instance, locally owned bookstores garnered an estimated 55.4 percent of all book-selling revenues in San Francisco and the neighboring cities of Daly City, Colma and South San Francisco in 2005.
That's far more than nationally, where independent bookstores are responsible for about 10 percent of book sales.
Locally owned sporting goods stores held an estimated 56.2 percent of their market, while local toy stores were responsible for 44.4 percent of toy sales.
Meanwhile, locally owned cafes and sandwich shops took in 63.9 percent of San Franciscans' spending at restaurants without waiters or waitresses. Chains such as McDonald's, Starbucks and Subway had 36.1 percent of the market.
"To get well over half the market versus chain stores is really unusual," said Dan Houston, a consultant with Civic Economics in Austin, Texas, who co-authored the report. "I live in Texas and it is not possible that could be the case down here."
The study also attempted to quantify the ripple effect of local retailers and their chain competition on the San Francisco economy.
It concluded that local stores and restaurants return much more money to the surrounding community, since they tend to buy their supplies and services locally.
For instance, locally owned bookstores create an estimated 2.14 local jobs -- both directly through their own hiring and indirectly through hiring by their vendors and service providers -- for every million dollars of books sold.
Chain stores create fewer, according to the study -- just 1.27 local jobs for every million dollars of sales. And most Internet stores such as Amazon create no local jobs because their headquarters and warehouses are out of town.
"What was most illuminating to me were the job generation numbers," said Rick Karp, owner of Cole Hardware and a member of the Local Merchants Alliance. "I've always made that case but never honestly knew the statistics behind it. This shows that what we've been stating all these years is quantifiably true."
The study did not address pricing differences between chain stores and local merchants or how the cheaper prices common to big-box stores might benefit consumers and the local economy.
And a spokesman for the National Retail Federation said the study should be viewed skeptically as a political document.
The local merchants "are going to look for metrics that bolster their argument against larger competition," said Daniel Butler, vice president of the federation, which is the world's largest retail association. "It sounds like they are looking for ways to control zoning and keep other companies from coming in to the market."
The merchants acknowledged they see the study as a competitive weapon. But their focus is less on using the data to win zoning battles than on using it to influence consumers.
They're hoping that San Franciscans will think about the local economic impact when they make shopping decisions. And they're asking residents to shift 10 percent of their spending away from chain and Internet stores to local retailers.
Shifting 10 percent of all retail spending would create a net gain of 1,295 jobs and $191 million in local economic activity, according to the study.
"We're not asking people to boycott the chains, just to shift some of their spending," said Hut Landon, executive director of the Locally Owned Merchants Alliance. "Say you buy 10 books, and four or five of them usually come from independent booksellers? Buy six."
