The North American Retail Hardware Association (NRHA) and Independent We Stand released a new study May 9 that provides insight into how much home improvement professionals can impact their communities by buying local.
The Home Sweet Home: Pros’ Edition study examines the positive economic activity that professional contractors, builders and other tradespeople generate by supporting independent building supply, hardware, power equipment and paint dealers rather than buying from national companies.
Key Study Highlights
- Purchasing home building supplies and products from independent retailers keeps more than twice as much money in the local economy compared to identical purchases made at big-box chain stores.
- Independent STIHL dealers as well as other independent home improvement and building supply dealers recirculate 250 percent more dollars locally than their major chain competitors.
- Nationwide in 2016, a total of $243 billion was spent on single-family residential construction in the private sector. Collectively, these projects would require $133.7 billion in purchases of tangible goods. If professional contractors, builders and tradespeople shifted just 10 percent of those purchases from national chains to independent suppliers, hometowns around the nation would enjoy the benefits of an additional $1.5 billion in economic activity.
NRHA, which is a nonprofit trade organization serving the independent home improvement industry, and the shop-local organization Independent We Stand, presented the study May 9 at the National Hardware Show® in Las Vegas. The organizations commissioned the study, and economic analysis and strategic planning firm Civic Economics conducted the research.
“Once again, we’ve worked hard to create effective research that accurately depicts the economic influence locally owned businesses have on an individual community and how that initial impact has the potential to generate national economic activity,” says Dan Tratensek, NRHA vice president and publisher of Hardware Retailing magazine. “This pros’ edition of our Home Sweet Home Study reinforces how critical it is for retailers and consumers alike to be aware of the impression we leave when we choose to shop local.”
Tratensek presented the study findings with Chris Long, STIHL Inc. business development manager, and Bill Brunelle, co-founder of Independent We Stand. They also introduced a new “Home Sweet Home Economic Impact Calculator,” which is a tool that gives professional contractors, builders and tradespeople an estimate of how much their independent business purchases can return to their local economy.
Home Sweet Home: Pros’ Edition builds on prior findings on the greater impact that independently owned businesses have on communities. NRHA and Independent We Stand’s prior Home Sweet Home Study focused on consumer spending.
The pro version of the study evaluates how purchases by professional contractors, builders and tradespeople, when building a hypothetical single-family home with a $1 million budget, impact a community financially. The study considered purchases in three distinct sectors: building materials (35 percent), hardware (15 percent) and power tools and equipment (5 percent).
At the end of the project, excluding labor costs, the study shows about $550,000 would be spent on supplies. If these expenditures were made at locally owned independent home improvement and building supply dealers, $129,650 would stay in the local community. If these same expenditures were made at chain stores, only $64,025 would remain in the local economy. The difference would be an additional $65,625 staying local.
“Our work with NRHA has produced some exciting results which further illustrate the impact across lines of goods and merchant types and allowed us to follow the dollars into the economy,” Brunelle says. “One of Independent We Stand’s goals is to educate consumers about the importance and strong economic benefits of supporting locally owned businesses. The Home Sweet Home: Pros’ Edition study helps us do so.”