Survey: Portland business owners disadvantaged compared with chains, Internet sellers

Customers browse the selection inside Longfellow Books, a Portland Buy Local member business, in Portland in March of 2012.
Customers browse the selection inside Longfellow Books, a Portland Buy Local member business, in Portland in March of 2012. Buy Photo
Posted Feb. 18, 2014, at 1:19 p.m.

PORTLAND, Maine — About two-thirds of independent Portland businesses saw sales increases in 2013, but many reported struggling with high health insurance and marketing costs, according to the results of two surveys released this week by the organization Portland Buy Local.

The surveys — which attracted the most responses from retailers and restaurateurs — also found that local business owners feel they’re at a disadvantage compared with national chains and Internet sellers.

One of the two questionnaires was distributed by Portland Buy Local to the group’s membership, while the other study was done by the Institute for Local Self-Reliance.

Portland Buy Local has approximately 450 member businesses and, as its name suggests, campaigns for shoppers to spend money with locally owned businesses.

The release of the survey results last week came before the organization cuts the ribbon on a new office space Feb. 26.

For the Institute for Local Self-Reliance study, 64 businesses, with an average of less than seven employees each, responded. Among them were 25 retail and six food service businesses, as well as 16 “service providers,” which included anything from lawyers to hair stylists.

Of those who weighed in, 67 percent said they saw an increase in sales from 2012 to 2013, while the rest of the respondents reported flat sales or a decrease in the latest year.

That same amount — 67 percent, or 43 of the business representatives who answered the survey — said they believed public support for local businesses has increased over the past year.

Across all respondents, the average increase in annual sales from 2012 to 2013 was 7.4 percent.

But those who took part in the study reported problems as well.

Rating business challenges on a scale of 1-5 — with 5 being “extremely significant” — more than half of the respondents cited the high cost of health insurance benefits as either a 4- or 5-level hindrance.

Forty percent of the survey takers also gave those high challenge scores to marketing costs and competition by national chains, which the local businesspeople perceived as being able to spend less on inventory and getting more beneficial tax or rent agreements.

Sixty-seven percent of the retailers who responded said they believe they lose sales to online-only retailers such as Amazon.com, which in many states don’t have to includes sales tax in their purchase prices.

Those who took the survey also had plenty of suggestions for state and local politicians. Given a list of things elected officials could do to help businesses, respondents were spread somewhat evenly across a number of recommendations. The greatest amount, 40 percent, said they’d like to see more subsidies for small businesses and startups, while another 37 percent called for lower taxes.

Thirty-two percent asked for the government to level the playing field by cutting off public givebacks to big companies.

Although seven different suggestions for lawmakers received support from at least 20 percent of the respondents, only 16 percent — or 10 business reps — called for streamlining regulations and cutting red tape.

That relatively low number could be seen as a victory by Portland City Hall, which under Mayor Michael Brennan has launched a series of initiatives over the past two years aimed at greasing the skids for local businesses and developers seeking permits.

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