Where a dollar goes: what actually happens when you buy the cookie downtown
October 20, 20263 min read
Worden's Market has been on the corner in downtown Missoula since 1883, which means it was selling groceries to people before Montana was a state, before the railroad reliably came through, before the word "deli" meant anything to anyone west of Chicago. It is still there. You can walk in today and buy a sandwich.
I want to follow one dollar of that sandwich, because there is a number in the shop-local world that gets repeated so often it has worn smooth, and I think it deserves to be picked back up and turned over.
The number is forty-eight. A research firm called Civic Economics has spent two decades going into towns, pulling the books of locally owned businesses and the books of the chains down the road, and tracing where each dollar of revenue ends up. Across a decade of those studies, the average came out like this: forty-eight cents of every dollar spent at a locally owned business was spent again in the same community. Less than fourteen cents of a dollar spent at a chain was. The Institute for Local Self-Reliance ran its own version in a handful of Maine towns in 2003 and landed almost on top of it, forty-five to fourteen. In Salt Lake City, where Civic Economics looked at fifteen independent retailers and seven independent restaurants against Target, Home Depot, McDonald's, and the like, local retailers kept fifty-two cents in town and local restaurants kept seventy-nine, against fourteen and thirty for the chains.
Why. This is the part that gets skipped. The multiplier is not civic virtue. It is payroll, and it is who you hire to do the books.
A chain store in Missoula sends its profit to a headquarters in another state, buys its inventory through a national distribution center, has its accounting done in a regional office, its signage printed by a contracted vendor, its advertising placed by an agency in a city you have never been to. The people behind the counter are local and they are paid locally, and that is most of the fourteen cents. Everything else leaves.
Worden's buys bread from a bakery across town. It hires a Missoula accountant, a Missoula printer, a Missoula plumber when the walk-in cooler goes. The owners live here and spend here. When they put a deli sandwich on the trouvé map as a reward, the sandwich was made here from things bought here by people paid here, and the person who walked in to claim it is, more often than not, going to buy something else, which starts the whole circuit again. That is the whole mechanism. It is not mysterious and it is not sentimental. It is a river that happens to run in a loop.
Now the honest caveats, because the shop-local movement is sometimes its own worst enemy on this. The forty-eight is an average across a lot of different businesses, and restaurants run much higher than retail because restaurants are made of labor. A local shop that stocks the same imported goods as the chain, sources nothing nearby, and banks out of state will not hit forty-eight. The organization that publishes the summary of these studies, AMIBA, warns in the same document that one of the Civic Economics findings has been "the source of much confusion and misrepresentation." So: the direction is settled, the magnitude depends on the business. Say "roughly three times as much stays in town" and you are on firm ground. Say "exactly" and you are not.
Here is what I think the number is actually for. It is not a guilt trip. Nobody should feel bad about Target; Target is where the socks are. It is a way of noticing that the choice between two stores is also a choice between two circuits, one that closes in Missoula and one that closes somewhere else, and that the walk across downtown to the one that closes here is a small act with a long tail.
trouvé exists, if I'm being plain about it, to make that walk a little more likely. That is the opposite of the apps that pay you to walk anywhere. A business puts a reward on the map. You walk to it. You claim it in person, and the only time the reward leaves the counter is when you are standing there. The business paid for your visit in product it made, and roughly half of what you spend next stays in the same ten square miles.
A hundred and forty-three years ago somebody opened a grocery on a corner in a territory that wasn't a state yet, and the dollar you spend there today has a reasonable chance of being spent again by a neighbor before the week is out.
