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Consumer spending in the foundational economy

March 1st 2021

Successful growth of the local foundational economy will depend in part on the spending power of the local population.

This paper examines household expenditure in three communities in the south Wales valleys. All  have a core of foundational goods and services, especially in the “overlooked”  economy of retail, hair and beauty, takeaways, eating out and recreation and leisure. However, spending power also leaks out to nationally-owned stores, online vendors and places beyond the three communities as well as other local businesses.

Some factors work to limit the local market. Each place have relatively small local populations. Households which are most likely to spend in the foundational economy tend to have lower levels of disposable income. The spending power of households with higher levels of disposable income, including the outward-commuting population, is more likely to be absorbed elsewhere.

There is a perception of a lack of choice and some higher prices in parts of the local foundational economy. High prices penalise households which are unable to travel elsewhere to buy essential goods, often low-income households. There is also lack of choice of more niche goods and services.

One of the strengths of the local foundational economy in all three places is loyalty to the locality and to foundational businesses amongst customers. Strong relationships and good customer service work to retain and secure local spending.

Report format: PDF

Language: English

Pages: 28

Cost:  Free

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