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Are Big Brands Important to Local Economies?

Local Economies

More and more nowadays, we’re seeing big brands popping up across the country and beyond.  Whether it’s an Apple store in Aberdeen, a Nando’s in Norwich, or an online casino operating all over Ireland, these brands are instantly recognised by locals and, it’s often said, pose a threat to smaller local businesses.

But is that always the case? While big brand stores do attract lots of customers, they might not necessarily be detrimental to local economies on the whole.

The rise of big brands

With every product or sector, there’s a big brand that’s become almost synonymous. McDonald’s with burgers, IKEA with flat-pack furniture and Primark with fast fashion. You only have to look at the number of branches these brands have launched to see their popularity in the UK.

There are over 1,000 McDonald’s in the UK, more than 170 Primark stores and now more than 20 large IKEAs – all exceeding 20,000 square metres in size. Crucially, these numbers are growing. Only last year, for instance, Frasers Property Group announced a drive-thru Starbucks at Scotland’s biggest business park near Glasgow Airport.

The impact they’re having

The question is – what effect does this have on a local economy? It’s easy to assume that somewhere like Primark could stop shoppers heading to smaller local businesses.

Looking at the wider picture, however, these big brands could actually help local businesses thrive. Firstly, because of footfall. Whether you like it or not, established brands provide peace of mind and simplicity for consumers. They know what they’re getting, which is what drives them to towns where those brands have set up shop. 

As an example, McDonald’s serves 3.8 million customers every day in the UK.  Those customers aren’t all heading out just for food. Needless to say, this footfall will benefit other businesses nearby, as those consumers shop for clothes, electronics or furniture, for instance.

Boosting employment

Of course, it’s not just about attracting customers from further afield. Local economies are reliant on the local community. More specifically, they need a local community with money to spend.

One other benefit of big companies is that they provide much-needed employment for local residents. Tesco is one of the biggest private sector employers in the UK, for instance, withalmost 350,000 UK staff. Not all of these staff are going to buy their shopping from Tesco. Even if they do, they have money to spend elsewhere on clothes, food and whatever else they choose.

On top of that, there’s the benefit to local contractors, suppliers and service providers. Although they operate nationally, many of these big companies will look locally when they need something fixed or just want to provide local products for their customers.

Overall, this big plus point could easily outweigh the supposed detriment to smaller competitors.

Finding a balance

There’s no arguing that big brands create strong competition for smaller businesses. However, there are also some clear benefits when it comes to footfall and employment. The key is striking the right balance.

It’s true that in areas where big brands dominate across the board, it’s difficult bordering on impossible for small competing businesses to survive. However, it’s also tricky for those small businesses to hold up the local economy on their own.

With a mixture of big brands and small, local enterprises, local economies can truly work for everybody.

What do you think?

Written by themoneyshed

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