Governments and councils are inadvertently pushing customers away from the very businesses they claim to be supporting through poor planning decisions.
Peter Strong, CEO of the Council of Small Businesses of Australia (COSBOA), suggested that poor urban planning and infrastructure developments are effectively stifling SMEs and handing customers directly to larger players.
“I look at urban planning, where you see some of the councils have been moving carparks underneath shopping malls etc.,” he said.
“If we’re going to have diversity in the community, we’ve got to go back and have a look at urban planning and the way some people control where people shop.”
According to Mr Strong, such monopolies don’t just adversely affect SMEs, but are also not ultimately a good thing for consumers.
Research by American Express released in conjunction with the launch of its Shop Small campaign suggested that there is a “boomerang effect” from local spending, whereby an average of 42 cents in every dollar spent at a small business is directly reinvested into that community.
As such, by not supporting neighbourhood shopping precincts, planners are effectively causing longer-term damage to those communities by stripping out a local cycle of cash flows.
“Independent businesses have long been recognised as a source of employment and neighbourhood character, but the multiplier effect of choosing to spend money at small businesses is less well-known,” said Katrina Konstas, American Express’ vice president for small merchants.
“The ‘boomerang dollar’ effect shows that almost $38 billion is reinvested into our communities every year through local spending – that’s a huge amount that’s going back into business’ tills, workers’ pockets and towards worthy community causes. Shopping small can have an enormous effect.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.