When you spend money at businesses which are owned by people that live in your community, more of that money continues to circulate in your area. It's better for the local economy, if only marginally, and therefore better for you.
This is more important for businesses that produce and capture a larger amount of value, like locally owned restaurants vs corporate owned chains, but any little bit helps at least a little.
(Of course if you're a rootless corporate mercenary who goes wherever work takes you, with no long-term stake in the place you live, then it doesn't matter at all.)
It's less true in retail (of non locally made goods), here the margins are in the supply contract (think the volume discounts on alibaba or Sam's club).
It's likely that a mega retailer like Walmart generates this margin in their supply chain, bulk land/space and pays out, in total more via wages and benefits (particular possible with the scale of healthcare costs and benefits programs like scholarships)
This is an interesting take. I'm not sure it's true but I will look it up. My knee-jerk reaction is that most large purchases already siphon your money away (home, car, travel), and overthinking where to buy a random small object for the house makes no difference, but I hadn't considered the locality of money circulation!
Amazon discusses that every dollar of salary produces $2.5 of local economic activity, eg, because their workers buy coffees that then pay the salaries of baristas who then…
That money comes from many communities and is distributed to a handful; and I think it would be interesting to quantify the loss of economic activity from Amazon moving money out of a community.
Honestly it's interesting to me that this is a novel take to you. I believe it is a generally understood, if not acted on, principle.
Money sent off to Detroit or Japan for your car is as good as lost to your community, but as I said even a small amount of money spent locally will help your local community a small amount, which is more than none. Even eating at a locally owned McDonald's franchise is slightly better than eating at a corporate owned store. That difference is probably too small to be worth looking up who owns a McDonalds, but if the choice is between McDonalds or some local diner then it doesn't require any time spent looking it up.
> it is a generally understood, if not acted on, principle
I think you'd be surprised to realize how much that's not actually the case.
If you google the "Preston model", you'll find a lot of material waxing lyrical about the government of a lone city in England that actually dared to follow that principle in their procurement strategies. They are doing well, but the fact that it feels revolutionary for mainstream sensibilities shows that those principles are still very unknown to most.
(I should add: the principle of locality is not always a good thing, because there are scoundrels everywhere. Again in England, the regeneration of massive swaths of land previously used for steelmaking is being done through well-connected local businessmen and corrupted politicians, and it is a shameful rip-off for the taxpayer. If a national government had done that, the relevant minister would have faced the sack; but it's ”old boys” from the area, the national press is not interested, and so it's just business as usual.)
This is more important for businesses that produce and capture a larger amount of value, like locally owned restaurants vs corporate owned chains, but any little bit helps at least a little.
(Of course if you're a rootless corporate mercenary who goes wherever work takes you, with no long-term stake in the place you live, then it doesn't matter at all.)