For every dollar spent at a small business in Australia 42 cents is reinvested back into the local economy, American Express has found at the launch of it’s Shop Small Scheme launched recently. The Shop Small event which is sponsored by American Express and aims to encourage local communities to shop at independent small businesses rather than big outlets over the months of November.
Described as the boomerang dollar, the research has found 27 cents finds it’s way back to communities through salaries to residents, 12 cents to local suppliers and 3 cents to local charities, schools and sponsorship’s. The Boomerang Dollar effect shows that almost $38 billion is reinvested into Australian communities every year through local spending.
However, consumers are still choosing larger companies over smaller businesses. Just 29 percent of consumers say they have increased their shopping frequency, with small firms in the past year, down from 37 percent in 2016. Despite this, 43 percent of small businesses reported increased turnover in the past year, while a fraction fewer were holding steady.
Loyalty may be an old fashioned concept. But when you consider that the majority of Australian’s have lived in their local area for three years or more, the longevity of local businesses is important. The Council of Small Business of Australia, chief executive Peter Strong has declared.