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Reasons to shop locally
Insights and trends

Reasons to shop locally

30 June 2021

5 min read

How does shopping locally help the economy?

In recent times, many of us may have gotten to know our local high streets like the back of our hands. The start of the COVID-19 pandemic saw our movements limited by lockdown restrictions, and while this has helped boost e-commerce, it has also been an opportunity to shop local and support small businesses. But how can you position yourself as a valued local business, And in a world where online retail keeps on growing, why do people shop local at all?

The benefits of shopping locally

If you run a local business, or you’re thinking of setting one up, below are some of the reasons why it may be a good idea and why shopping locally could help the community in general.

  1. Customer satisfaction. If you’re a local business, you may have an opportunity to connect with customers who increasingly like shopping locally. According to Mastercard research from 2020, 74% of shoppers in Europe said they are now more likely to shop in their local communities than they were previously.
  2. Social interaction. The internet has been transformational for businesses, and there may be advantages to moving your business online. But there are some things in life you simply can’t do on the web – from getting a haircut to having coffee with friends – and many customers support small local businesses for the opportunity to socialise.
  3. Customer service. A local business may give customers the chance to interact face-to-face with the person at the counter. As a store owner, this could be an opportunity to share your knowledge and inspire a loyal following.
  4. Sustainability. Shopping locally could mean less or shorter car journeys and for local businesses that supply each other’s inventory, less travel miles when it comes to importing goods. And while we’re on the subject of sustainability, some local businesses may wish to go paperless or offer e-receipts.
  5. Support local business. How does shopping locally help the local economy? Well, every pound spent at a local business could well end up being reinvested locally, which may not be the case when shopping online, or at a far-flung chain store.

How shopping locally can help the local economy

Shopping locally could benefit a business in isolation, but what about the wider local economy? Here are some potential upsides for the community’s coffers:

  • Economic activity. Spending money locally could have a knock-on effect elsewhere. To give one example, the money you spend on a local restaurant could later be spent by the kitchen staff on their taxi ride home. In fact, for every £1 spent on a small business, there is an extra 63p benefit for the local economy (Source: Federation of Small Businesses).
  • Support for local entrepreneurs. Backing a small business may help that firm attract investment. Ultimately, this could mean local job creation, increased revenue from tax and business rates, and inspiration for the next generation of entrepreneurs.
  • New businesses. A local business that becomes a success story could be viewed as a vote of confidence in a neighbourhood. Their popularity could encourage other businesses to set-up shop in the area, and once these start-ups are cited in a business plan or two, a ‘virtuous circle’ of increased economic growth may emerge.

How a community can support local businesses

Businesses can give back to their local communities in all sorts of ways – from sponsoring school fairs to donating to food banks – but there are also ways you can encourage customers to shop local and boost small businesses’ cash flow in your area. Here are some ideas:

  • Online reviews. An honest online review that gives credit where credit is due could be invaluable for a local business. You may wish to encourage customers to leave a review if they’ve had a positive experience with your company.
  • Gift cards. By offering a gift card that has to be spent in your store – and potentially other local stores – you might make some extra revenue. A gift card could provide a unique form of revenue, not just through selling the card, but through any additional purchases a customer makes beyond the amount of credit they have.
  • Word of mouth. Customers can support local businesses by spreading the word. Increasingly, this can happen online, as many communities have local social media pages.

How does online shopping affect local businesses?

There is a lot of talk that the internet is ‘crushing’ the high street, but is this true? Local businesses often embrace a hybrid model, where their internet presence complements their real-world offering; for example, some coffee roasters market their products online, then deliver to customers locally. These days, many consumers are looking to support local small businesses that are convenient, offer great customer service, and are sustainable.

Can small businesses survive?

Local businesses have not exactly had it easy in the 2020s so far, what with a global pandemic, changes to the way we import and export, and the ever-present risk of fraud. But the world of small enterprise has been remarkably resilient; in fact, 2020 saw the highest number of new start-ups created EVER.

Read all about it in our special report: The Year of the Start-up.

Our business support guides

We’ve got plenty more business guides in our content hub, so if you’re looking for insights on everything from Click and Collect to PCI compliance, read more over at Tyl Talks. Here are some of our latest guides:


This has been prepared by Tyl by NatWest for informational purposes only and should not be treated as advice or a recommendation. There may be other considerations relevant to you and your business so you should undertake your own independent research.

Tyl by NatWest makes no representation, warranty, undertaking or assurance (express or implied) with respect to the adequacy, accuracy, completeness, or reasonableness of the information provided.

Tyl by NatWest accepts no liability for any direct, indirect, or consequential losses (in contract, tort or otherwise) arising from the use of the information contained herein. However, this shall not restrict, exclude, or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed.

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