By Deanna Lytle
UT News
Article published September 7, 2004
Dr. Gbenga Ajilore, assistant professor of economics and a faculty research associate for the Urban Affairs Center, has completed a study for Lucas County Commissioner Tina Skeldon Wozniak on local businesses.
In the "Toledo-Lucas County Merchant Study", Ajilore looked at the economic impact locally owned Thackerary's Books has on the area economy versus national chain Barnes & Noble. Using industry standard multipliers, he found that $100 spent at Thackeray's yields a local economic return of $44, while $100 spent at Barnes & Noble leads to an economic return of $20.
The idea for the study originated in fall 2003 when Sue Wuest, assistant director of the Urban Affairs Center, and Wozniak saw a report about the impact of a Borders store coming into a shopping area in Austin, Texas. The decided to do a similar study in Toledo and approached Ajilore.
"I decided to use Thackeray's Books as a case study to see how consumer spending at Thackeray's impacts Lucas County," Ajilore said. He interviewed Chris Champion, Thackeray's public relations manager, to gauge the impact of the store and gathered budget data from the bookstore for the actual numbers comparison.
As for the difference in results, Ajilore said he is not surprised. "Thackeray's is a well-known store in Toledo and its location at Westgate allows for them to have a significant impact."
He offers several explanations as to why money spent at the bookstore yields more local economic return. "Thackeray's makes a concerted effort to use local firms," Ajilore wrote in the study. "Many of the firms that they emply are hired through word of mouth. For example, the electricians used by Thackeray's ... were recommended to them by an employee who had used them sometime earlier." Ajilore added the bookstore supports local artists and authors through special events and book signings.
Ajilore concludes the study by suggesting the organization of a "buy local" campaign to encourage consumers to patronize local shops. "In fact, if each household in Lucas County redirected $100 of spending to a locally owned store, this could add up to $8 million in revenue to the local economy," he wrote.
The study was funded by the Urban Affairs Center, the Anderson's, Toledo City Council President Louis Escobar, and Thackeray's Books.