Local Economic Impact

by Mandy Catlette, National Co-op Grocers

Economists measure the impact a business has on its community by calculating its “multiplier effect.“ This is a number that represents how much money is recirculated/generated in the local economy for every dollar spent by the business and is based on the amount of money spent on locally paid wages and on local goods and services.
Food co-ops have an economic multiplier of 1.6, and conventional stores 1.36. For a consumer, this means for every $1,000 spent at a local food co-op, he/she is generating $1,604 in economic activity locally; $239 more than if that $1,000 were spent at a conventional grocery store. On a communitywide scale, a co-op with annual sales of $10 million generates $16 million in local economic impact, whereas a conventional grocery store of the same size in the same community would have an economic impact of $13.6 million. By choosing to support a food co-op of that size, a community can increase its economic activity by $2.4 million dollars a year, which is a significant number for most small to mid-size communities.
 

To read the full article on the economic impact of co-ops, please go to By the Numbers: Food Co-ops' Community Impact in the November/December 2012 edition of Co-operative Grocer magazine.