Today’s Salt Lake Tribune carried an article headlined “Most prefer local stores: But panelists say bolstering hometown businesses is difficult in today’s economy.” A panel discussion — sponsored by Local First Utah, a nonprofit group started in 2005 – focused on recent Tribune poll results, which indicated 73 percent of the city’s residents would support municipal measures to limit the number, locations, and size of big-box retailers. The city council, with Mayor Rocky Anderson’s support, is considering an ordinance that would preserve the city’s unique neighborhood business districts.

One of the options being floated is to restrict the appearance and size of franchised or chain retailers but not necessarily the number. Jill Remington Love, a Salt Lake City councilman who lives in the 15th and 15th neighborhood, apparently prefers options other than a straight-out ban on chain retailers. Rather, she would offer business consulting and temporary incentives such as rent-free incubation for new local businesses.

Love’s suggestion certainly makes good sense if some caveats are acknowledged and followed. As a downtown resident, I definitely take pride in some of the excellent local businesses near my apartment. I enjoy first-rate coffee, tea, and gelato at caffe d’bolla or a casual Italian dinner at the Stoneground restaurant on 400 South. I frequently visit the English Garden in the Salt Lake City Library to purchase truly fresh flowers, unusual plants, and hard-to-find home accessories. For books, I can count on Sam Weller’s or Ken Sanders Rare Books. My favorite stomping grounds for a meal include Takashi’s for sushi and the Atlantic Café on Main Street for European cuisine. And, the must-do local list should include visits to Caputo’s and Aquarius Fish near 300 South and 300 West, across from Pioneer Park. There are others and likely they, too, will be discussed and featured as this blog progresses.

However, I should add there are plenty of other local businesses that need to do much better in order to merit being part of the Local First movement. A good local business mindset requires these elements: a well-researched business plan, outstanding product, and excellent customer service. In other words, the most successful local business will not be viewed as a competitor with the bigger networked or franchised players but instead as a truly first-class entity that deserves its niche in a community’s business environment. If a local business does not have these essential elements then, frankly, it has no place in the city’s commercial landscape.

The Local First Utah web site has a respectable body of resources and links that speak to the advantages of “buy local” campaigns. However, I believe we need more dispassionate analyses of the benefits and drawbacks before we decide the operational hallmarks of a “buy local” campaign. Dave Swenson, a researcher and lecturer at Iowa State University, studied the economic impact of two campaigns in Des Moines and Omaha to arrive at some realistic measures.

He listed a solid list of advantages but also drew some attention to a few drawbacks – most notably, the positioning of campaign messages that should not only benefit the metropolitan center but also the surrounding suburban and rural communities. In other words, the message should not be too localized or unnecessary tensions (or worse, negative word of mouth) might arise.

The other drawback most vulnerable to local retailers and chamber of commerce leaders is the misperception of the multiplier effect. I quote Swenson at some length here:

“Whether by accident or by design, local merchants and economic development folks latch onto two [phenomena] that they think is important. The first is something called money turnover. A person will say something like, ‘a dollar spent locally will turn over 5 to 8 times.’ Related to this comment is the popular idea that there is a local money multiplier of, according to one small area chamber executive, ‘from 4 to 5.’ In their minds, a dollar spent locally leads to $4 or $5 of multiplied through sales. Many really believe that money spent locally multiplies like rabbits. And countering those assumptions with charts, math, and schematics often actually undermines our intellectual authority on the matter. This is especially irksome to local merchants, an issue made worse when we introduce them to the idea of margined sales. When push comes to shove, local folks will believe the person with the biggest numbers. Otherwise, we leave them with a sense of economic development cognitive dissonance. The service experts tell us one thing, our leaders tell us another, and our eyes tell us something else. Whom to believe?”

Swenson’s caveat is worth noting. A good dose of common sense would do much to help ensure a Local First campaign benefits the broadest spectrum of the city’s commercial enterprise.