We all need to ‘shop local' before we find ourselves with ‘no local'
NEARLY 15 years ago, I sponsored a media campaign which encouraged people to think of their local shops and services when it came to spending their money. It was an important message then, and still is today. So, in your final days of Christmas shopping, and then into post-Christmas shopping, consider carefully how and where you spend.
Sometimes we can make purchases or use services outside of our locality without fully thinking of the impact of doing so.
I prefer to think of non-local businesses as large vacuum cleaners sucking the life, soul and money out of local areas and shipping them off into complex financial offshore arrangements where no tax is paid, thereby turning local towns into ghost towns. At best, the profit is going off to shareholders, or even share prices, but this doesn’t circulate the money locally as many do not own those shares.
I always use local cafes where possible, but have been in Starbucks three times in my life. It just felt wrong. So, the news that Starbucks received a UK tax credit in 2020 worth £4.4 million even though they made a profit of £870million wears thin.
Capitalism seems to work in good times, eh!
While the UK arm of Starbucks reported a £41 million loss, the UK accounts showed a gross profit of £32 million but unspecified admin expenses of around £70 million were applied, which took it to the aforementioned loss. In 2020, its European business paid a dividend of $183 billion to its US parent company. Dividends between companies in the same group are not subject to tax! Long sigh.
Starbucks are just an example of many choices we can make when we buy. According to Statista, 52 per cent of UK shoppers buy locally to support local business, as opposed to 68 per cent in Canada for example.
Think of the many disadvantages of buying online:
Plastic wrapping packaging on every product as opposed to one bag; every single product is delivered/returned/redelivered as opposed to one trip to the shops for a group of products; risk of online fraud/scamming; knowing the fitting or quality of the product; knowing the suitability which a store manager will be clear on because he will face you next week in a local bar; less contact with the community; return sponsorship – Amazon don’t look after the local football teams’ shirts. I could go on.
Consider also the biometric tracking via online purchasing. Canvasblocker for example shows how many sites are tracking your fingerprints and blocks that happening. Fifty per cent of sites I was visiting were tracking that data and creating their biometric profiling to further try and sell me ‘stuff’ I don’t need, or worse, selling that to horrific institutions to market to me.
No thanks. My local store manager at my shop will just be interested if I’m going to the match, where I’m going for beer that night, or if my girls are at uni or not.
Okay, there is the advantage for buying sensitive items in an online store rather than walking around like Father Ted in the lingerie section looking awkward, but guessing the wrong size online isn’t as clever as blaming the store manager for giving you the wrong size!
As you have already witnessed, if we all shopped online, there are ghost towns left behind. They are no longer sustainable, and those that are left must somehow fund the rates/bills the council needs – price hike.
People stay on in town after shopping and create the atmosphere which is a fundamental psychological need for society as we have found out over the last two years - we need to interact.
A local business can generate 70 per cent more local activity than the ‘big box’ companies and some studies in the USA who would be leading the trend show that local shops produce a return of $326 for every 1,000 square feet compared to an annual deficit of $468 per 1,000 square foot.
Buying local also means something special. Compare the experience of the locally owned shop and staff and their commitment and uniqueness versus the ‘samey’ feeling in the chain store which is like sucking a sweet with a wrapper still on it.
Overseas companies monopolising and closing local shops will force locals onto the benefits queue, the benefits which will not be paid by the aforementioned non tax-paying organisations.
Shop local - because you’ll miss them if they are gone.
:: Peter McGahan is chief executive of independent financial adviser Worldwide Financial Planning, which is authorised and regulated by the Financial Conduct Authority. If you have a financial query, call Darren McKeever on 028 6863 2692, email email@example.com or visit wwfp.net.