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City dwellers support small businesses more than suburbanites do, study shows

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Credit card data shows urbanites frequent small and mid-sized retailers 10 to 15 percent more than those living in the 'burbs.

In this information age, it should come as no surprise that a major bank is analyzing our credit card transactions to better understand buying patterns. The JPMorganChase Institute took a look at more than 16 billion credit card transactions from 54 million anonymized Chase customers in 15 U.S. cities to create their most recent Local Consumer Commerce Index.

The report charts consumer spending by geographic area as well as age and income levels. But it also provides insight into small business patronage. Across the board, city-dwellers made 10-15 percent more of their purchases at small and medium businesses than their nearby suburban neighbors. City planners the world over often champion small and medium-sized businesses as essential to a vital street life and local economy.

Previous analyses from JPMorganChase have demonstrated that urbanites in centralized cities spend a greater proportion of their money at small, local establishments than suburbanites. The differences in spending were greatest in Detroit, Michigan, where residents within the city limits made 72.5 percent of expenditures at smaller businesses, 18.2 percent more than other residents in the greater metro area.

New Yorkers logged the largest proportion of local small-business spending, with 36 percent of their purchases taking place in smaller establishments like bodegas and boutiques. On the other end of the spectrum, the residents of Columbus, Ohio, made just 23 percent of their retail transactions in small businesses.

The JPMorganChase report classifies "large" businesses as those with 8 percent or more of the metro area’s market share. Establishments with a market share beneath that number are further divided into "medium" and "small" businesses.

Source: City Observatory, JPMorganChase Institute