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Small businesses alive and well in Boston, study says

Posted by Jason Keith  November 11, 2011 06:00 AM

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Oftentimes big-time chain stores are the mortal enemy of the local small business owner. Typically, they can offer the same thing a local business can, and typically it’s cheaper and easier to get. If you’re ever read the Wal-Mart Effect, you have a sense for what a big chain store can do to the local business community. It’s part of the reason why “buy local” or “go small” events like American Express’s Small Business Saturday have become so popular. It’s a day that helps raise awareness for local businesses, and even incentivizes people to maybe change their purchasing habits.

As part of the upcoming Small Business Saturday, the American Express OPEN Independent Retail Index was recently released, the first-ever 20-year analysis of America’s independent businesses. It examined the economic vitality of locally owned retail businesses, dining establishments and bars. Conducted by Civic Economics, the study was an economic analysis looking at 15 cities, including Boston and 27 neighborhoods, including Allston. When compared to the other 14 study cities, Boston’s Index rankings were third for retail shopping, fifth for eating and drinking, and fourth overall.

In Boston, from 1990 to 2009, independent retail shops saw their percent of the market decline from 61 percent to 56 percent, the smallest decline of all the 15 study communities. During the same period, independent restaurants and bars in Boston saw their percent of the market drop from 79 percent to 75 percent. But, according to Daniel Houston, who conducted the research along with Matt Cunningham, Boston saw a steady increase in the overall rankings, despite the decline in market drop. In other words, the area dropped less than the average, which allowed it to rise into the top five.

Suffolk County saw relatively little decline over the study period, and even an uptick in the Eating and Drinking category,” said Houston. “Boston’s rank in the Retail Shopping index climbed steadily over 20 years, from 9th to 3rd, because independents there competed so well and earned such loyalty from their customers.”

There were a number of reasons why Boston fared so well in the index and skewed positively to small, independent businesses. One was that because Boston is a small city where space is limited, the opportunities for chains aren’t as plentiful. It’s also clear that at times local communities work to block those types of businesses in the city. Roxbury faced a similar situation recently, with local leaders speaking out against Wal-Mart’s efforts to move into the area.

“I can’t really speculate on how numbers would differ in the suburbs, but in this study density certainly seems to provide a boost to the independents and land use is clearly a factor,” Houston continued. “The density of a place like Boston – and we certainly recognize that Allston is an urban neighborhood – makes it harder to build large-format stores than it is in the suburbs or in some of the other big cities in the study.”

But according to Houston, Boston also possesses other factors that position it to succeed in this area, including a unique sense of community and a responsibility to local commerce.

“I think the character and culture of New England have a lot to do with Boston’s performance,” said Houston. “Over the years of talking about small business from coast to coast, New Englanders have surprised us with how obvious it is to them that locally owned businesses are important to their communities.  Moreover, communities in the region are laid out so that residents of villages and big cities alike are never too far from a classic town center with shops, churches, maybe government buildings.  As a result, residents identify closely with their town or their neighborhood within a big city like Boston, and the businesses that serve them are a big part of that.”

Let’s hope that the trend of Boston catering to and supporting independent businesses, and even regain some of the lost percentage points over the past 20 years. To view the entire study referenced above, click on this link.

Do you feel a greater responsibility to buy local as a Boston resident? Do the results of the survey surprise you? 

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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About this blog

Jason Keith has been working for and with small businesses in the New England area for more than 10 years, specifically small, micro businesses. Born and raised in Massachusetts and a former journalist, he provides a unique perspective on the issues facing small businesses locally and nationally.To reach him directly email

This is a personal blog. The opinions expressed here are the author's alone.

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