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Do Customers Prefer Local Businesses? What the Surveys Show
Americans trust small business more than any other institution Gallup measures, yet trust and convenience pull in different directions, and the owners who benefit are the ones who make local feel as easy as the alternative.
At a glance
- In Gallup's 2025 survey of 1,402 U.S. adults, 70% said they had a great deal or quite a lot of confidence in small business, the highest of 18 institutions and more than four times the 15% for big business.
- In a Civic Economics study of 10 U.S. communities, independent retailers kept 47.7% of their revenue in the local economy, against 13.6% for national chains.
- Trust does not settle the choice on its own; e-commerce reached 17.1% of U.S. retail sales in the second quarter of 2026, and a local business earns the preference by making booking and buying as easy as ordering online.
The number and where it comes from
Gallup has tracked Americans' confidence in small business alongside other major institutions since the 1990s, and small business topped the 2025 list. The June 2025 survey was conducted by telephone with a random sample of 1,402 adults and has a margin of error of plus or minus four percentage points; small business scored 70%, the military 62% and science 61%, while big business sat near the bottom at 15%.
The figure has been steady rather than a recent spike; small business scored between 62% and 75% every year from 2009 through 2025. What it measures is confidence in small business as a group, which gives a new owner some goodwill before the first customer walks in, and each visit either confirms it or uses it up.
The second number answers the customer's quieter question, does it matter where I spend? The Indie Impact Study Series, run by the research firm Civic Economics with the American Booksellers Association, surveyed 106 independent retailers and 28 restaurants in 10 communities in 2011 and 2012 and compared their spending with the public reports of national chains. Independent retailers recirculated 47.7% of revenue locally through local payroll, local suppliers, local services and profits spent nearby, against 13.6% for chains, about three and a half times as much.
The study is more than a decade old and drew on businesses that chose to take part, so it is best read as the pattern rather than a precise rate for your town; a later Civic Economics study in Dane County, Wisconsin, published in 2023, found independent retailers recirculating 47.4% of revenue, close to the national figure.
Your own local dollar, worked out
Owners can make the same calculation for their own business and put the result on a sign, a receipt or a website page. Add up what you spend each year with people and businesses in your area, such as wages paid to staff who live nearby, rent to a local landlord, local suppliers and services and the share of your own pay you spend locally, then divide by revenue.
| Annual revenue (Assumption) | $400,000 |
|---|---|
| Payroll to staff living locally (Assumption) | $140,000 (35%) |
| Rent to a local landlord (Assumption) | $40,000 (10%) |
| Local suppliers and services (accountant, cleaner, printer) (Assumption) | $20,000 (5%) |
| Owner pay spent locally (Assumption) | $20,000 (5%) |
| Dollars kept local (Calculated) | $220,000 |
| Local share of each $100 (Calculated ($220,000 ÷ $400,000 × $100)) | $55 |
Illustrative example; replace every assumption with your own numbers. Civic Economics' independent retail average was 47.7%.
A line such as "About $[amount] of every $100 you spend here stays in [town]" turns a vague appeal into a fact customers can repeat, and it rests on your own books rather than a national slogan.
How you compare
- Against the study: a result near or above 47.7% puts you in line with the independent retailers Civic Economics measured; a result near 14% looks more like a chain's.
- Against the convenience gap: check whether a new customer can see your prices, hours and booking options online as quickly as they could on a national site, since that is the comparison a customer used to ordering online will make.
- Your own baseline: ask new customers at checkout whether being local was a reason they chose you, and tally the answers for a month.
Sources
- Gallup. Confidence in Institutions, topline and tabs. July 2025. 1,402 U.S. adults, June 2–26, 2025.
- Civic Economics and American Booksellers Association. Indie Impact Study Series: national summary. 2012. 106 retailers and 28 restaurants in 10 communities.
- Dane Buy Local and Civic Economics. Independent Businesses Recirculate More Revenue in Dane County. 2023.
- U.S. Census Bureau. Quarterly Retail E-Commerce Sales, 2nd Quarter 2026. August 2026.
Related reading: What Customers Learn About Your Business Before They Ever Call · Where Small Service Businesses Actually Get Their Customers · Partnering With Neighboring Businesses for Referrals · Getting Featured in Local News and Neighborhood Guides
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