But price remains a factor when choosing between hometown businesses and national chains
Home is where the heart is for high net worth households, and, if the price is right, they are more than willing to put their money where their heart is by supporting local businesses, according to a June survey of investors conducted by Millionaire Corner.
In some obvious cases, the decision is a no-brainer. Nearly all (94 percent) of respondents with a net worth of more than $1 million said they would patronize a local hardware store than an online distributor. It gets a little trickier for purchases that are of less immediate need. High net worth households are virtually split about making purchases at the local book store or an online distributor such as Amazon, which typically offers deeper discounts on its items.
Local coffee shops fare much better. Nearly three-quarters (70 percent) of high net worth households said they prefer their local coffee shop to a chain such as Starbucks.
But high net worth households—all wealth levels we surveyed—will go where the price is right. Seventy percent of the wealthiest households will opt for a chain grocerty store over the local neighborhood grocery, which often cannot compete on price.
When asked directly whether they would make purchases at a locally-owned business instead of a national chain, even if the local business was much more expensive, high net worth respondents overwhelmingly (69 percent) said no. Less than 11 percent said they would support more expensive local businesses.
Support for local business increases when the price differences are not as dramatic. Forty-six percent of high net worth respondents said they would patronize a local store if it was only slightly more expensive than the national chain. Eighty-six percent would go local if prices were comparable to those of a national chain.
Our research finds that local businesses enjoy the strongest support from less wealthy households. Surprisingly, households with a net worth of less than $100,000 are the most likely to patronize a local shop even if its prices are much higher than a national chain store. But here, too, they are much more likely to shop at a chain grocery store than they would a local neighborhood grocer (62 percent vs. 38 percent).
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.