June 9, 2015


JFS's Local Responsible Consumers Study Meetings

Keywords: Civil Society / Local Issues Newsletter 

JFS Newsletter No.153 (May 2015)

Photo: JFS's Local Responsible Consumers Study Meetings

Japan for Sustainability (JFS) has held seven study sessions titled "Local Responsible Consumers " with a total of 20 people, from February 2015. The sessions were conducted among small numbers of close friends with the support of the Environmental Grants Program of Patagonia Japan, hoping to facilitate learning opportunities different from ordinary study sessions. How did the participants' awareness change as the result of the study sessions?

The purpose of the study sessions has been to pass along the results of the survey, also conducted with Patagonia's support, on local community and consumer behavior as well as the impacts of shopping at local stores. To deliver the information to people who do not usually attend study sessions on local economic matters, JFS asked some people to get together with their friends at a cafe, for example, where we provided them study sessions. In other words, we literally "delivered" the study sessions.

Everyday Shopping Can Promote Local Economies, Says JFS Survey

At the study sessions, we asked people to fill out a short version of the questionnaire that we had used in December 2014 and explained the results of our national survey. Then we talked about the economic impacts of shopping locally, and finally asked the participants to fill out the same questionnaire again to ascertain changes in their opinions. In this article, I introduce part of the study session contents, changes in the participants opinions as a result of the sessions, and their comments afterwards.

Study Session Content--Shopping at Local Private Businesses Helps the Local Economy

Through these study sessions, we wanted to deliver the message that anybody could contribute to a prosperous local economy through everyday shopping. The study sessions were therefore based on "Plugging the Leaks," a theory developed by the New Economics Foundation in the U.K. Let me explain the idea briefly.

Imagine people pouring water into a bucket. This bucket represents a community. The water poured by the people represents money going into the community through tourism and investment. This bucket, however, has a lot of holes, and the water (money) coming into the community starts to leak from the holes.

If housing construction is subsidized in a community, for example, but the construction company is not local, the money goes through the community and quickly leaves. In fact, only 12 percent of the metal parts used by electronics manufacturers in Scotland are made in Scotland. In our increasingly globalized world, our local economy is just like the leaking bucket.

The leaking bucket theory emphasizes the circulation of money in an area as well as plugging the leaks. For example, money enters an area through tourism, and in the next cycle, it goes to the employees who live in the area as their income. Later, the income is spent in their local shopping.

In this way, by falling into many hands locally, the money's value will be multiplied. Suppose someone spends 20 percent of his $100 income in the area, with the rest being spent outside the area, and the cycle is repeated. In the first round, $20 of $100 is spent at local restaurants, for example, and it stays within the area. In the second round, 20 percent of it ($4 of $20) stays in the area. Thus, the total amount of money repeatedly spent in the area ultimately amounts to about $120.

In contrast, suppose someone spends 80 percent of his $100 income in the area and the rest is spent outside the area, and the cycle is repeated. In the first round, $80 of $100 stays within the area, and in the second round, $64 stays locally. In this way, changing many hands slowly within the area, $100 can eventually have a worth of about $500. Circulating money within the area can have large economic effects.

To read more about the theory, see the New Economics Foundation website, where you can download their booklet free of charge

So how about shopping at a supermarket or chain store? In these kinds of shops, a not-so-small percentage of their sales is sent to their headquarters. For example, a Japanese convenience store pays 40 percent of its total sales to the franchise headquarters as a royalty.

Moreover, many local stores and businesses place orders with other businesses in the same local area for procurement, accounting, printing and cleaning. This means the money can be used repeatedly within the area. In contrast, in the case of a large chain store, the money paid to the local people is limited to the form of wages, and other services are contracted mainly from national-scale businesses. Online shops never bring money into a community, even as wages.

For example, according to a study by an American group, Advocates for Independent Business, while $14 remains in the local economy when we spend $100 at a national chain store, if we spend the same amount at an independent retailer, $48 stays in the area. Regarding employment, the research says that for every $10 million spent, a local store hires 57 people, while Amazon (a major online store) hires only 14 people.

Thus, in terms of the local economy, it is more effective to shop at a local, independent business. Moreover, we can help not only the economy in which we live now, but also other areas. For example, you can help the area where your workplace is located by shopping at an independent store near your office. Also, although I noted above that major online stores create no jobs locally, you may help the local economy in some areas if you shop at online stores that are based in your hometown or any area you support. You can also help local economies by making different choices of hotels, restaurants or shops when you travel.

The booklet Plugging the Leaks introduces a case in Cornwall in the UK (about the size of Tottori Prefecture in Japan). According to the study, it is estimated the money spent in the local area would increase annually by 52 million pounds (about 9.5 billion yen , or about US$ 79.2 million), if travelers, local residents and businesses allocated one percent of their spending to local goods and services.

Why not help the local economy as much as possible by shopping at a local independent store once a week?

Study Session End Survey -- What Changes Occurred in Participants' Ways of Thinking?

At the end of each study session, we asked the participants to look through the survey again to see if they would change their answers. Regarding the question on whether they cared if the money they paid would help the local economy, roughly a quarter of the participants changed their opinion to "yes." As for the question on whether they thought it was necessary to change the current state of the local economy of their living area, 20 percent of the participants changed their answers. This indicates changes in the participants' understanding of the actual situation as a result of the study sessions. Furthermore, some participants deleted "supermarket" from their list of shops where they wanted to buy vegetables.

At the end of the sessions, some participants said that they had never considered contributing to the local community by shopping in it, and that they would go to a local, independent restaurant for dinner that day. When they left, they put what they had learned into practice right away.

JFS believes we can find a key to our happiness and sustainability of the global environment in local communities, so we will keep you informed of interesting practices with a focus on Japanese local initiatives.

Written by Naoko Niitsu