When the Local Paper Dies, Local Brands Pay the Price

When a local newspaper shuts its doors, the community loses more than headlines and high school sports scores. There's been lots of research documenting how local papers shutting down negatively impacts voter participation and civic engagement, but how does it affect small local businesses? New research finds that local brands - the regional salsa makers, hometown breweries, and family-owned food companies stocked on grocery shelves - lose visibility and ultimately lose sales.

The research paper, "The Diminishing Local Lens: A Study on the Economic Effects of Local Newspaper Closures on Regional Brands", was developed by researchers at Georgia State University's Robinson College of Business and will be published in Management Information Systems Quarterly(MISQ). The study examined more than a decade of newspaper closures across the United States and found that brands sold only within their home state saw weekly revenue fall by an average of 7.8 percent after their local paper stopped publishing. Across the roughly 3,600 local brands studied, that adds up to an estimated $17.9 million in lost sales every year - about $5,000 per brand.

It's the first large-scale evidence that the collapse of local news is having consequences beyond civic life, extending into local consumer markets and regional businesses.

Local newspapers don't just cover school boards. They run ads for the bakery down the street, write features about hometown businesses, and help consumers discover products made in their own communities and states. This study asked: when a local newsroom closes, what happens to the everyday marketplace?

"We wanted to learn how these local paper closures impact the local economy and how these papers catered to the local consumer," said Alok Saboo, lead author and marketing professor at Georgia State's Robinson College of Business. "We wanted to find out whether the information delivered in a local paper could be adequately substituted and delivered through other channels, like digital media."

To find out, the researchers matched newspaper closure records from the Library of Congress with retail checkout data from thousands of grocery, drug, and mass-merchandise stores between 2006 and 2017. They then compared sales of local brands in counties that lost a newspaper against sales in neighboring counties - places with similar economies and demographics - that kept their newspapers. The approach, validated with six different statistical methods, allowed the team to isolate the effect of the closure itself from broader economic ups and downs.

The 7.8 percent average masks dramatic differences in who gets hurt. And the patterns tell a story about what newspapers actually did for local commerce.

Small, lesser-known brands took the hardest hits. Brands with low sales volumes saw revenues fall by roughly 10 percent, while high-volume brands with loyal customers barely budged. Budget-priced local brands lost ground while premium brands stayed largely insulated. In dollar terms, low-priced local brands lost about $6,656 per year on average, compared with $1,664 for their large-brand counterparts.

The product aisle mattered, too. In crowded categories with dozens of competing options and wide price ranges, local brands suffered nearly triple the losses of brands in simpler categories.

Perhaps most striking was a finding about the communities themselves. Counties dense with small businesses saw the worst declines - a predicted 17 percent drop in high-density markets. The researchers suggest the newspaper acted as a kind of marketplace guide, helping consumers cut through the clutter of a crowded business landscape. Without it, local brands simply got lost in the noise.

Notably, national brands in the same counties showed no decline. People didn't stop spending; local brands became less visible following newspaper closures.

"This finding really shows that local visibility matters. If you have a well-known national brand, you're going to be okay, but if you have a smaller, local brand without a large advertising budget, it's going to be even harder to break through in those dense markets when you lose a valuable ad and informational channel, like the local newspaper," said Saboo.

One of the study's most sobering findings concerns the digital age itself. The revenue declines occurred during a period of rapidly expanding internet access, yet broadband availability made no measurable difference in softening the blow. General-purpose digital platforms, the researchers conclude, have not replicated the local visibility, information aggregation, and community embeddedness that newspapers historically provided.

That carries weight far beyond the grocery aisle. Nearly one in five Americans now lives with limited or no access to reliable local news, and closures continue. For the small brands that anchor regional economies - providing jobs, keeping profits local and giving communities their distinct character - the loss of the local paper is proving to be more than a civic tragedy. It's an economic one.

The findings offer a practical map for business owners and policymakers alike: the communities most at risk are those crowded with small businesses but thin on the economic and institutional resources that help information travel. As the local news crisis deepens, knowing where the damage concentrates may be the first step toward repairing it.