Arizona is definitely in a financial crisis and as part of that there has been a lot about shopping locally. This is seen as a primary way to help stimulate the local economy. I have noticed that many metro area cities have instituted their own Shop Local programs (Gilbert, Chandler, Mesa, Tempe). I am a fan of supporting the local business owner. I think it makes good sense both economically and for the community in general.
However, I have three criticisms about the whole shopping local movement:
1. The shop local programs are pushing shop in your “tax district”, that is if you live in Chandler, shop in Chandler. They make no distinction about shopping at the Chandler Starbucks vs the Chandler local coffee house. While I absolutely agree that just keeping the tax dollars in your community is a healthy start, it still doesn’t help educate about supporting the locally owned business.
2. There is too much hate being spilled on chains. Chains are not a bad thing as a whole. We need a healthy mix of chain and local to get our needs met and keep prices low. Whatever happened to things in moderation?
3. There are always numbers cited, but never reference to the studies they were derived from. I fully suspect money spent locally has a better chance of staying locally, but we need to put citation when numbers are used.
So the next time you are out and have your wallet open. Ask yourself a few things…
1. Am I spending money in my tax district and thus making sure the majority of the tax I am paying goes towards the operation of the place I live?
2. Am I getting enough convenience and/or price discount to justify not meeting and supporting someone providing the same service/product that might be my next door neighbor?
I believe it’s okay to shop at Wal-Mart, Target, Fry’s, etc. As long as you are aware of the options and the various effects. I think people should be more conscious about how they spend their money and who they support, but at the end of the day, it’s still their choice. 
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I work for an employer based in Austin, but I spend most of my money (food, rent) locally. So I see myself as a money transfer conduit from Austin to Greater Phoenix.
Companies based here that do work for clients based elsewhere are probably forms of this, as well.
I think that’s an interesting way to think about economy, and the results of selling to locals vs. selling to those who are remote (usually in the form of services, for tech).
The article mentions that Kimber cited the 2002 report from the Austin-based Civic Economics: http://www.liveablecity.org/lcfullreport.pdf (PDF).
LocalFirst AZ apparently commissioned study (by Civic Economics) their own in 2007:
http://localfirstaz.com/procurement-matters/index.php
It’s not only the sales tax dollars, but the administrative/ corporate jobs (and their salaries) as well as business dividends/profits (tax taxes), etc that get funneled back into the local economy when you buy from a locally owned company vs a national chain where those go to where ever the headquarters is located.
Also, while I’m a big proponent of buying from small businesses, the benefits from buying local doesn’t always mean you need to buy small. Basha’s, Wist, UHaul, PF Chang/Pei Wei and PetSmart are all Valley owned companies.
At the end of the day, however, local businesses (large or small) need to provide value from service to justify the convenience/price difference, and while a lot do, many do not.