Just 29 per cent of consumers claim to have increased their shopping frequency with small businesses in the past year, compared with 37 per cent in 2016, according to a report from American Express.
The ‘Economy of Shopping Small: Keeping it in the Community’ report reveals Australians now spend around $340 per month on their grocery shopping. In 2017, consumers spent only 30 per cent of this average spend with smaller, independent retailers – down from 48 per cent in 2016
According to the report, only 55 per cent of surveyed shoppers still believe they can find almost everything they need in their small-business community, compared with 66 per cent in the 2016 report
Despite this, the outlook for small business is positive, the report says, with 43 per cent of small businesses in the survey reporting increased turnover in the past year, and 41 per cent holding steady. This is good news for more than just the small-business sector as, on average, 42¢ of each dollar spent at a small business is reinvested back into the community through salaries to residents (27¢) and payments to local suppliers (12¢). The remaining 3¢ is used to support local charities, schools and sponsorships.
This trend, coined the ‘boomerang dollar’ by American Express, demonstrates the important role of local businesses.
“What goes around comes around,” American Express Vice President for Small Merchants Katrina Konstas said. “Independent businesses have long been recognised as a source of employment and neighbourhood character, but the multiplier effect of choosing to spend money at small businesses is less well known.
“The boomerang-dollar effect shows that almost $38 billion is reinvested into our communities every year through local spending – that’s a huge amount going back into business tills, workers’ pockets and towards worthy community causes. Shopping small can have an enormous effect.”
American Express this week launched ‘Shop Small’, which it describes as a nationwide movement with the aim of bringing together support from the business community, governments and consumers to support small businesses. American Express card users registered with the Shop Small promotion will receive $10 credit for every $20 they spend in participating businesses, up to a total of $50. Shop Small is running throughout November.