02-Nov-2017 1:00 PM

Australia’s small businesses are banding together to keep local customers coming through their doors.

A quarter of every dollar spent in Australia goes to a small business. More importantly, on average, 42 cents of each dollar spent at a small business is reinvested back into that local community. This trend, coined the ‘Boomerang Dollar’ by American Express, clearly demonstrates the important role local businesses play in our daily lives.

To mark the start of Shop Small this November, American Express released The Economy of Shopping Small: Keeping it in the Community Report highlighting the importance of the Boomerang Dollar. Money spent with small businesses finds its way back to communities through salaries to residents (27 cents) and payments to local suppliers (12 cents). The remaining 3 cents is used to support local charities, schools and sponsorships.*

Yet Australians are still choosing larger companies over smaller independent businesses. Just 29 per cent of consumers claim to have increased their shopping frequency with small businesses in the past year, compared to 37 per cent in 2016.

Despite this, the outlook for small business is positive, with 43 per cent of small businesses reporting increased turnover in the past year, and 41 per cent holding steady. This is good news for more than just the small business sector as almost half of what we spend in small businesses is invested back into local economies.

Katrina Konstas, American Express’ Vice President for Small Merchants said, “What goes around comes around. 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.

“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.”

Two thirds of consumers would choose a small business or recommend it to others if it supported other local businesses. Firms with strong neighbourhood networks reported increased sales through referrals (53 per cent), a sense of satisfaction from supporting neighbourhood economies (43 per cent), and increased customer reach (41 per cent); demonstrating that it pays to work with your local peers.

Peter Strong, CEO of the Council of Small Business of Australia (COSBOA), observed: “Australia is a nation of neighbourhoods where we put down roots we keep planted for years, so we invest in the places we call home. Loyalty may be an old-fashioned concept, but when you consider that the majority*** of Australians have lived in their local area for three years or more, the longevity of local businesses is important. From years of supporting Shop Small, and the role I play every day at COSBOA, I know the importance of culture and community: which is why I encourage all Australians to join the movement this November.”


Notes to Editors:


To view and download The Economy of Shopping Small: Keeping It In The Community report please visit

*Businesses were asked to break down the proportion they spent on local community rather than detail the entire range of their outgoings.

**Figure calculated using ABS’s data on average weekly household expenditures of $750.36 for a range of consumer goods and services and 9,270,000 households in Australia. Consumer respondents claimed 24.6% of expenditure is in small business, totalling $88,978,069,462 annual expenditure of selected consumer goods spent in local small businesses. Small business owners were asked to break down the proportion they spent on local community, which accounted for 42 per cent of turnover.

***82 per cent of the survey respondents claimed they have lived in their area for three years or more

About Shop Small

Shop Small, founded by American Express, is a nationwide movement that brings together support from the business community, governments and consumers to support small businesses. Shop Small begins on 1 November 2017 and runs for the entire month. American Express Card Members registered with the Shop Small promotion will receive $10 credit for every $20 they spend in participating businesses, up to a total of $50. Visit and follow #ShopSmallAU for more information.


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