Corporate Co-Opt of 'Local'

[Multimedia show: Brian Madison of Madison's at Findlay Market discusses the "buy local" movement in Greater Cincinnati.]

HSBC, one of the biggest banks on the planet, has taken to calling itself “the world’s local bank.” Winn-Dixie, a 500-outlet supermarket chain, recently launched a new ad campaign under the tagline, “Local flavor since 1956.” The International Council of Shopping Centers, a global consortium of mall owners and developers, is pouring millions of dollars into television ads urging people to “Shop Local” — at their nearest mall. Even Wal-Mart is getting in on the act, hanging bright green banners over its produce aisles that simply say, “Local.”

Corporate local washing is now spreading well beyond food. Barnes & Noble, the world’s top seller of books, has launched a video blog site under the banner, “All bookselling is local.” The site, which features “local book news” and recommendations from employees of stores in such evocative-sounding locales as Surprise, Ariz., and Wauwatosa, Wis., seems designed to disguise what Barnes & Noble is — a highly centralized corporation where decisions about what books to stock are made by a handful of buyers — and to present the chain instead as a collection of independent-minded booksellers.

Across the country, scores of shopping malls, chambers of commerce and economic development agencies are also appropriating the phrase “buy local” to urge consumers to patronize nearby malls and big-box stores. In March, leaders of a new Buy Local campaign in Fresno, California, assembled in front of the Fashion Fair Mall for a kick-off press conference. Flanked by storefronts bearing brand names like Anthropologie and The Cheesecake Factory, officials from the Economic Development Corp. of Fresno County explained that choosing to “buy local” helps the region’s economy.

The real ‘buy local’ movement

In one way, all of this corporate local washing is good news for local economy advocates: It represents the best empirical evidence yet that the grassroots movement for locally produced goods and independently owned businesses now sweeping the country is having a measurable impact on the choices people make.

“Think of the millions of dollars these big companies spend on research and focus groups. They wouldn’t be doing this on a hunch,” says Dan Cullen of the American Booksellers Association (ABA), a trade group that represents 1,700 independent bookstores and last year launched IndieBound, an initiative that helps locally owned businesses communicate their independence and community roots.

Signs that consumer preferences are trending local abound. Locally grown food has soared in popularity. The U.S. is now home to 4,385 active farmers markets, one out of every three of which was started since 2000. Food co-ops and neighborhood green grocers are on the rise. Driving is down, while data from several metropolitan regions show that houses located within walking distance of small neighborhood stores have held value better than those isolated in the suburbs.

A growing number of independent businesses are trumpeting their local ownership and community roots, and reporting a surge in customer traffic as a result. In April, even as Virgin Megastores prepared to shutter is last U.S. record store, independent music stores across the country were mobbed for the second annual Record Store Day. A celebration of local music retailers that features in-store concerts and exclusive releases, the event drew hundreds of thousands of music fans into stores, was one of the top search terms on Google and triggered a 16-point upswing in album sales, according to Neilson SoundScan.

In city after city, independent businesses are organizing and creating the beginnings of what could become a powerful counterweight to the big business lobbies that have long dominated public policy. Local business alliances — like Stay Local in New Orleans, the Metro Independent Business Alliance in Minneapolis-St Paul and Arizona Local First in Phoenix — have now formed in more than 130 cities and collectively count some 30,000 businesses as members.

Corporations take note

None of this has slipped the notice of corporate executives and the consumer research firms that advise them. In its annual consumer survey, the New York-based branding firm BBMG found that the number of people reporting that it was “very important” to them whether a product was grown or produced locally jumped from 26 to 32 percent in the last year alone.

“It’s not just a small cadre of consumers anymore,” says founding partner Mitch Baranowski.

“Food is one of the biggest gateways, but we’re seeing this idea of ‘local’ spread across other categories and sectors,” says Michelle Barry, senior vice president of the Hartman Group. A report published by Hartman last year noted, “There is a belief that you can only be local if you are a small and authentic brand. This isn’t necessarily true; big brands can use the notion of local to their advantage as well.” Barry adds: “Big companies have to be much more creative in how they articulate local. … It’s a different way of thinking about local that is not quite as literal.”

One way corporations can be “local” too is to stock a token amount of locally grown produce, as Wal-Mart has done in some of its supercenters. The chain’s local food offerings are usually limited to a few of the main commodity crops of that particular state — peaches in Georgia or potatoes in Maine — and sit amid a sea of industrial food and other goods shipped from the far side of the planet.

This modest gesture has won Wal-Mart glowing media coverage, few of which have asked the salient question: Does Wal-Mart, which now captures more than one of every five dollars Americans spend on groceries, create more and better opportunities for local farmers than the grocers it replaces?

Wal-Mart, like other chains, has learned that with consumers increasingly motivated to support companies they perceive to be acting responsibility, tossing around the word “local” is a far less expensive way to convey civic virtue than the alternatives.

“Local is one of the lower-hanging fruits in terms of sustainability,” Barry says. “It’s easier for companies to do than to improve how their employees are treated or adopt a specific sustainability practice around their carbon footprint.”

Redefining local

Still another corporate strategy is to redefine the term “local” to mean not locally owned or locally produced, but just nearby. “With the term ‘local’ being so nebulous, it seems ripe for manipulation,” says Mintel, another consumer research firm that counsels companies on how to “craft marketing messages that appeal to locally conscious consumers” and how to avoid “charges of ‘local washing.’ ”

The key, Mintel adds, is for companies to decide what they mean by local and to disclose that clearly so as not to be accused of trying to misappropriate the term.

Corporate-oriented buy-local campaigns that define “local” as the nearest Lowe’s or Gap store are now being rolled out in cities nationwide.

“It doesn’t only hurt local business — when chains seek to capitalize on the ‘buy local’ movement, they can deceive customers,” Fisher says. “People who think they are supporting their neighbors end up giving their money to companies who don’t have an interest in the community.”

Many of these campaigns are modeled directly on grassroots initiatives. “They copy our language and tactics,” says Michelle Long of Sustainable Connections, a seven-year-old coalition of 600 independent businesses in northwest Washington.

When billboards proclaiming “Buy Local Orlando” first appeared in Orlando, Fla., Julie Norris, a cafe owner who last year co-founded Ourlando, an initiative to support indie businesses, was excited to see the concept getting such visibility. But she soon realized that the city-funded program, which provides businesses that join with a “Buy Local” decal, seminars at the Disney Entrepreneur Center and a listing on the Web site, was open to any business in Orlando.

“We sat down with the city and said, ‘What you guys are doing is a real disservice to the local business movement,’ ” she says. When Norris complained publicly, city officials accused Ourlando of being “exclusive” by not allowing chains.

Orlando agreed to remove from its press materials and Web site a reference to a study that found that, for every $100 spent locally $45 stays in the community. The problem was that the study, conducted by the firm Civic Economics, found that to be true only if the money was spent at a locally owned business. Shop at a chain store, the analysis found, and only $13 of that $100 spent stays in the community.

“A local-washed chain store still does not contribute to the area’s economy like a true locally-owned business does,” Fisher says. “Instead of keeping money circulating in Cincinnati, these faux local businesses are still beholden to shareholders and corporate offices.”

The faux campaigns might be doing more harm to local economies than good, according to Jeff Milchen, co-founder of the American Independent Business Alliance, an organization that helps communities start local business alliances. “If you encourage people to shop at a big-box store that takes sales away from an independent business, you’re just funneling more dollars out of town, because, unlike chains, local businesses buy lots of goods and services, like accounting and printing, from other local businesses.”

The irony of trying to solve declining city revenue by trying to get people to shop at the local mall is that the mall itself may be the problem. While many California cities are facing budget cuts and even bankruptcy, Berkeley has managed to post a small increase in revenue. Part of the reason is that Berkeley has more or less said “no” to shopping malls and big chain stores and is instead a city of locally owned businesses that primarily serve local residents, creating a more stable revenue base.

Will ‘big local’ triumph?

Can corporations succeed in co-opting “local” — or at least muddling the term that it no longer has meaning? The Hartman Group’s Barry thinks that’s possible.

“For many consumers, these things are not being called into question much. They say, ‘Hey, it’s my local Wal-Mart or my local Frito- Lay truck,’ ” he says.

Local-washing has prompted local business advocates to reconsider their language. Many are now using the word “independent” more than “local.” Controlling language is critical, says Ronnie Cummins, director of the Organic Consumers Association, who is pushing for tighter regulation of the word organic, as well as rules governing terms like natural, sustainable, and local. “We’ve been fighting so long without the help of federal regulators that some people have forgotten that tool.”

Ultimately, local-washing could backfire and make corporations even more suspect.

“I think the fact that the chains are trying to play the local card, in a way, makes it easier for us,” Cullen says. “People are going to recognize that these aren’t authentic and that’s going to make the real thing all the more powerful.”

KEVIN OSBORNE contributed to this story.

STACY MITCHELL is a senior researcher with the New Rules Project (www.newrules.org) and author of Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses (Beacon, 2006). Mitchell works for the Institute for Local Self-Reliance and is on the board of the American Independent Business Alliance; both organizations are referenced in this story.