Transition Towns WIKI

Local money vs global money

Losing local stores and businesses

Small stores are especially valuable to local economies, as they are the natural outlet for many small local businesses: not just food producers, but also craft workers, repair services and so on. Like small farms, small shops tend to employ proportionally more people in relation to the size of the business. This incidentally might make you suspicious of the claims of supermarkets that they "create" jobs: it is hard to see how this is so if they are causing small retailers to close down. And that assertion doesn't pass the "corporate ethics" test where cost reduction, particularly of payroll, is crucial.

And we are losing these sources of local produce and local employment in all our communities. Probably everyone reading this can think of a small food retailer - greengrocer, butcher, general store - that has closed down recently.

For example, in the Forest of Dean in Gloucester, of the three food stores which closed in the Lydney area in 1996-97, all of which sold local produce, only one was replaced by another business (not food) - the other two shops stand empty.

Losing these stores is grim for their owners and employees, and bad for local suppliers. It is a nuisance for those of us who used to pop in to them to pick up this or that.

Furthermore, local stores are a lifeline for community health too. The daily trip to the shop may be the sole social event in the routine of an elderly person living alone, or to a low-income mother without a car. But even for those who can shop further afield as well, it is in the village shop, the small greengrocer or butcher, where your face is recognised and your children are asked after.

Quantifying the impact

But it's when you look at the financial impacts of local shops vs national chains that you really see the impact on the local economy.

Here is an example of how powerful your shopping decisions are. Consider a supermarket where 80% of the money spent at the till leaves the local economy, and only 20% is left as wages, rates and services. If £100.00 is traded four times it leaches out of the local economy fast:

Within four trades £100 is down to 16p left in the local economy.

If, however a local grower sells to you and 80% of the money stays in the local economy and 20% leaves then:

£40.96 is 256 times the amount left in the local economy compared with 16p. This is why our towns are drained of resources - every time we trade with non-local trading entities, our hard earned local money leaches out of the region to shareholders and city institutions.

What you can do

Start a local currency. Totnes already has and Lewes is planning theirs.

It's your economy, put it back in your own hands with a local currency.

Acknowledgements

This article was adapted from the Forest of Dean Local Food Directory 1998. Forest of Dean are one of our most recent additions to the official Transition list - our first Transition Forest!