Home sweet home, local edition
A new study — commissioned by groups that support independent hardware stores — is advancing the idea that buying home building supplies from locally owned businesses, as opposed to national chains, brings substantial benefits to local economies.
This concept has been advanced before. But the new study, conducted by economic analysis and strategic planning firm, Civic Economics, was released at the National Hardware Show in Las Vegas, follows the dollars further into the pro arena.
The study, “Home Sweet Home: Pros’ Edition,” was released at the National Hardware Show and commissioned by the North American Retail Hardware Association and Independent We Stand.
Among the findings:
Purchasing home building supplies and products from locally-owned retailers keeps more than twice as much of that money in the local economy as identical purchases made at big box chain stores.
Based on analysis, independent Stihl dealers as well as other independent home improvement and building supply dealers recirculate 250% more local dollars than their major chain competitors.
Nationwide in 2016, a total of $243 billion was spent on single-family residential construction in the private sector. Collectively, these projects would require $133.7 billion in purchases of tangible goods. If professional contractors, builders and tradespeople shifted just 10% of those purchases from national chain dealers to independent suppliers, hometowns around the nation would enjoy the benefits of an additional $1.5 billion in economic activity.
The Pros’ Edition of this report builds on the findings from previous analyses on the impacts locally owned businesses have over national chains on communities, but takes it a step further.
The study evaluated how purchases by professional contractors, builders and tradespeople building a hypothetical single-family home with a $1 million budget impact the community through purchases in three distinct sectors: building materials (35%), hardware (15%) and power tools and equipment (5%).
At the end of the project, excluding labor costs, the study shows about $550,000 would be spent on supplies. If these expenditures were made at locally owned independent home improvement and building supply dealers, $129,650 would stay in the local community. If these same expenditures were made at chain stores, only $64,025 would remain in the local economy. That’s a difference of $65,625 that stays local, according to the study.