Picture this… You spend $50 at dinner on Friday night. By Sunday, that money will either have helped create three more local jobs or will be sitting in a corporate account in Ohio. The difference? Where you chose to eat.
We’ve all heard “shop local” before. But most of us don’t really understand what happens to our money after we swipe that card. The truth? Where you spend makes a bigger difference to Denver’s economy than you probably realize.
The Great Denver Drain
Every time you buy something, your money goes on a journey. And for most purchases in Denver, that journey leads straight out of Colorado.
Here’s what’s happening: roughly 68% of what Denver residents spend goes to businesses headquartered somewhere else. That’s billions of dollars leaving our community every year, money that could be circulating here, creating jobs here, building wealth here.
Think about your last Target run. You spent $75 on household stuff. Maybe $15 of that stayed in Denver (mostly wages for local employees). The other $60? Off to Minneapolis, where Target’s headquarters are located.
How Money Actually Multiplies (Or Doesn’t)
Economists have a term for this: the multiplier effect. It’s pretty simple once you break it down.
When you spend $100 at a local business, here’s what happens:
- Direct impact: Your $100 goes to the business owner
- Indirect impact: That business owner buys supplies from other local businesses—maybe $30 worth
- Induced impact: All those employees spend their wages locally—another $15 or so
Total local economic impact: $145
Now compare that to spending $100 at a chain store:
- Direct impact: Your $100, but most immediately leaves for corporate headquarters
- Indirect impact: Limited local business-to-business spending—maybe $8
- Induced impact: Some employee wages spent locally—about $5
Total local economic impact: $113
The difference? $32 more economic activity for every $100 you spend locally instead of at chains.
What This Looks Like in Real Life
Let’s say you need dinner tonight. You’ve got two choices: the local taco place or Chipotle.
Local taco shop: Your $12 might support the owner’s family, the local supplier who delivers fresh tortillas, the neighborhood kid working part-time, and the local accountant who does their books. That owner probably shops at other local businesses, goes to the neighborhood bar, gets their car fixed at the local mechanic.
Chipotle: Your $12 mostly heads to corporate headquarters in California. A few dollars stay for local wages and rent, but that’s about it.
Neither choice makes you a hero or a villain. But multiply that decision by thousands of people making thousands of purchases, and you start to see how neighborhoods either thrive or struggle.
The Industry Breakdown
Not all local businesses create the same economic impact. Here’s how different types stack up:
Restaurants and bars have the highest multiplier effect—about 1.6x. They’re labor-intensive and often buy from local farms, breweries, and suppliers.
Home services (contractors, plumbers, electricians) come in close second at 1.7x. These folks hire locally, buy supplies locally, and their customers are neighbors.
Retail stores vary widely, but locally-owned shops that feature local products can hit 1.4x or higher.
Professional services (lawyers, accountants, consultants) typically run around 1.4x due to high local employment and business-to-business relationships.
Denver’s Local Advantage
Denver has some unique opportunities when it comes to keeping money local:
Our craft brewing scene is legendary, and breweries tend to have strong local supply chains—from local farms growing hops to local companies making equipment.
The outdoor recreation industry here often sources from Colorado suppliers and employs people who live, work, and play locally.
Our farm-to-table restaurant scene creates direct connections between Denver diners and Front Range farmers and ranchers.
The 25% Solution
Here’s something to think about: what if Denver residents shifted just 25% of their spending from chains to local businesses?
Back-of-the-envelope math suggests this would create about $1.3 billion in additional local economic activity. That could mean thousands of new jobs and tens of millions in additional tax revenue for city services.
You don’t have to go 100% local (that’s probably impossible anyway). But small shifts add up to big changes.
Start Where You Are
Nobody’s asking you to completely overhaul your spending overnight. But next time you need something, ask yourself: “Is there a local option?”
Maybe it’s grabbing coffee from the neighborhood café instead of Starbucks. Maybe it’s buying birthday gifts from local shops instead of Amazon. Maybe it’s hiring the local handyman instead of the national service company.
Every dollar you spend locally doesn’t just support one business—it supports an entire ecosystem of businesses, workers, and families. Your next purchase is a vote for the kind of Denver you want to live in.
The choice is yours. But now you know what that choice actually means.
