Why Support Locally Owned Businesses?
In issuing its approval for the Wal-Mart acquisition of Massmart, South Africa’s Competition Tribunal, a quasi-judicial body charged with protecting the public interest in large corporate mergers, imposed only minimal conditions on the deal, stating that stronger requirements to protect local suppliers and labour rights “could violate the country’s trade obligations.”
Wal-Mart first raised the specter of the World Trade Organization (WTO) during its closing arguments before the tribunal, which had just heard a week of testimony from unions, government officials, economists and others who built a compelling case that the merger should be subject to strict conditions or rejected altogether.
South Africa’s robust trade unions began organizing to block the merger last year, issuing a list of demands shortly after the deal became public.
So, in the face of Wal-Mart becoming a reality in South Africa and the Overstrand, we need to make sure that we support local businesses. Here are ten reasons why.
- Local Character and Prosperity. In an increasingly homogenised world, communities that preserve their one-of-a-kind businesses and distinctive character have an economic advantage.
- Community Well-Being. Locally owned businesses build strong communities by sustaining vibrant town centres, linking neighbours in a web of economic and social relationships and contributing to local causes.
- Local Decision-Making. Local ownership ensures that important decisions are made locally by people who live in the community and who will feel the impacts of those decisions.
- Keeping our Rand in the Local Economy. Compared to chain stores, locally owned businesses recycle a much larger share of their revenue back into the local economy, enriching the whole community.
- Jobs and Wages. Locally owned businesses create more jobs locally and, in some sectors, provide better wages and benefits than chains do.
- Entrepreneurship. Entrepreneurship fuels South Africa’s economic innovation and prosperity, and serves as a key means for families to move out of low-wage jobs and into the middle class.
- Public Benefits and Costs. Local stores in town centres require comparatively little infrastructure and make more efficient use of public services.
- Environmental Sustainability. Local stores help to sustain vibrant, compact, walkable town centres - which in turn are essential to reducing sprawl, automobile use, habitat loss, and air and water pollution.
- Competition. A marketplace of tens of thousands of small businesses is the best way to ensure innovation and low prices over the long-term.
- Product Diversity. A multitude of small businesses, each selecting products based, not on a national sales plan, but on their own interests and the needs of their local customers, guarantees a much broader range of product choices.