Spending dollars locally

New small business startups offer some room for optimism

We all talk about the lack of local jobs and the fact that many of our youth have to look for jobs far away. We tend to blame politicians, governments and companies.

Yet, at the same time, we do not use our spending dollars in ways that create employment locally. Most of us spend a lot of money buying electronics, books, clothes and furniture online, or shopping at the big box stores in Halifax, as if all the chain stores in the Cape Breton Regional Municipality are not enough.

Last week we sadly saw a 75-yearold Sydney jewelry business closing its doors, joining a number of longestablished Cape Breton businesses that faced a similar fate in the last few years.

I assume everyone knows that if you shop in Cape Breton you help maintain and create jobs in our community, especially if you are shopping at businesses owned by local people.

Local businesses proportionally employ more people, since they have their entire operation here, including their back office. Local businesses typically do not rely on inexperienced hourly workers. They tend to provide long-term employment and their employees earn enough to feed their families and pay their mortgages.

I used to operate an IT business that helped computerize a few local businesses and I recall that one of our customers, a local building supplies store, had 30 permanent employees and another, a fish processing business, had more than 200 employees. Local business is a lot bigger than meets the eye.

A number of studies have concluded that independent retailers return to the community nearly three times as much per dollar of sales than their chain and big-box counterparts — when we spend $100 at a local chain store, our purchase generates $17 in local spending by the store, but the same $100 spent at a locally owned business generates $45 in local spending (1).

Of course, if we spend $100 at a store in Halifax or spend $100 on Amazon or any other off-island retailer, our purchase generates nearly zero in spending in Cape Breton.

A recent consumer survey conducted by the Business Development Bank of Canada indicated that 97 per cent of Canadians intend to buy local (2), but actual local purchases reflect a much lower percentage.

Researchers have determined that consumers have good intentions but in reality price and convenience drive purchase decisions. It is not that we do not care, but that we find these purchasing decisions uncomfortable and that we get on with our daily routines.

Research has also established that people often want something different in the short term (e.g., chocolate cake) versus the long term (e.g., being thin) (3).

In our case, this suggests that we want the lowest prices and convenience for now, versus employment and prosperity in Cape Breton for the long term.

I feel a bit more optimistic lately though, as I see a few Cape Bretoners joining the “buy local” movement and a few new local businesses taking root.

One of our Cape Breton University MBA grads established the Cape Breton Food Hub a couple of years ago and it has been growing steadily — making fresh local food readily available to Cape Breton families and helping local farmers earn a sustainable livelihood. Two CBU grads started a craft brewery on Keltic Drive and it has become a roaring success. Two international students who earned hospitality degrees at CBU started an Asian restaurant on Dorchester Street in Sydney with help from the local franchisee of Boston Pizza, where they used to work, and our local CBDC. Only in Cape Breton would the community do so much to help hard-working newcomers.

Last week two of our BBA grads opened a burrito eatery in Sydney River. In addition, a few CBU grads have opened specialty food stores, service businesses and marketing agencies.

These are just a few examples of promising new businesses. Perhaps the tide is turning and local businesses will receive our love and support and succeed.

I have to confess that I have bought some items online but I do not frequent Walmart and I have yet to visit Costco.

I was fascinated by the Sears Wish Book ever since my first Christmas in Canada and I used to order something every year from that special catalogue. Sears is no longer and I have not moved over to Amazon. I still feel conflicted every time I buy something off the island. Sources:

1) “Independent BC: Small Business and the British Columbia Economy,” Civic Economics, February 2013.

2) “Mapping Your Future Growth: Five Game-Changing Consumer Trends,” BDC, October 2013

3) Julie Irwin, “Ethical Consumerism Isn’t Dead, It Just Needs Better Marketing,” Harvard Business Review, January 2015