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Clarke Cadzow, the owner of Highland Coffees just outside the North Gates of LSU, is as vocal an advocate for local, independent businesses as you will find.

But he’s also a realist. He says small businesses have it rougher in a city like than Baton Rouge than a place like Austin, which embraces such businesses through its “Keep Austin Weird” campaign.

“If you’re doing something unique and high quality, and maybe it’s a little bit more expensive, if you’ve got a city of a million people, you’re going to have a better chance of having people who want your product,” he says, mentioning a specialty bicycle shop as an example of a business that might do better in Portland, Ore., than in Baton Rouge. “In a smaller town, you might not be able to get the volume that you need.”

So the size and receptiveness of the market is key, Cadzow says. But in terms of factors a business owner can actually control, the key is delivering quality and personal service that a chain can’t deliver—then hoping for the best.

“You only stand a chance if you have a well-run company to begin with, and even then you have to get lucky, because the chains have unlimited resources local firms don’t have,” he says.

And chains are usually cheaper. Wal-Mart and McDonald’s might not be recession-proof—no business is—but such low-cost, low-service brands typically do well in a recession.

Take Wal-Mart, which receives more blame than any other company for leveling small businesses. In April, Wal-Mart posted a 5% increase in same-store sales [which don’t count new stores] over the previous year. Retail stores posted a 0.9% increase in April according to the consulting and research firm Retail Forward, but would have been down 2.3% without Wal-Mart’s numbers. On June 3, Wal-Mart said it would add 22,000 jobs this fiscal year.

Obviously, recession-conscious consumers are looking to save money, but small-business proponents argue that dollars spent in a locally owned business benefit the local economy—and in turn the spender—more than money spent at a chain.

Numbers to support that claim are hard to come by. One often-cited statistic is that for every dollar spent with a local business, 45 cents is reinvested in the community, versus only 13 cents of that same dollar spent in a chain. Officials with the National Federation of Independent Businesses could not confirm that number, or come up with their own statistic.

Renee Baker, the director of NFIB’s Louisiana chapter, says two out of three new jobs are typically created by small businesses, adding that money spent at a local business is more likely to stay here and benefit the community. But the experience of shopping locally is what keeps customers coming back, she says.

“The biggest thing people find shopping at small businesses versus the big box is the way that they’re treated, and I don’t think you can put a dollar figure on that,” Baker says. Store owners are more likely to recognize and know their repeat customers, and might even be willing to offer a small discount on occasion to those core buyers. “Small-business owners treat their employees like family, and I think they treat many of their customers the same way.”

“I have mixed feelings about it,” says Paul Dunn, director of the Small Business Development Center at the University of Louisiana at Monroe. “I help a lot of people go into business, and I patronize [local business] whenever I can, but some of them are more expensive than I can afford.”

The impact of a large, successful retail store like a Wal-Mart can’t be discounted, Dunn says. Often, Wal-Mart is the biggest employer in the community, although detractors argue many of those jobs are offset by job losses at smaller businesses. And when shoppers save money at a chain, they have more money left over to spend on other things. Conversely, local firms often send a lot of their dollars out of the state or the country, depending on where they get their merchandise.

Clarke Cadzow

“When [entrepreneurs] ask me, ‘How do you compete with Wal-Mart?’ I tell them that’s like going after a bear with a switch,” Dunn says. “What you really need to do is try to do something Wal-Mart doesn’t want to do or can’t do. Trying to out-Wal-Mart Wal-Mart is really a stupid idea.”

Jenni Peters, the owner of Varsity Sports on Perkins Road, says her store and Wal-Mart sell Nike, but the similarity ends there. Varsity Sports is for those people who don’t mind spending some dough on a good pair of running shoes.

“We may sell similar brands, but there’s just two different designs and levels of quality that go into the components,” she says. “You come here knowing it’s going to be little more expensive than you get at Shoe Station or Wal-Mart, but there’s a reason you come here.”

While Wal-Mart might not pose much of a threat, some people do drive out to Airline Highway or Siegen Lane to shop big-box Academy Sports instead of Varsity. Now another large competitor has moved in: Dick’s Sporting Goods, which opened a location at the Mall of Louisiana’s power center. Peters isn’t sure how much it will affect her, though she says the city’s sporting goods market is getting crowded.

“I’m not sure there’s enough room in town for the Academies, the Dick’s, the Bass Pros and the Cabela’s,” she says.

Some independent shops even say Wal-Mart drives business their way. Gordon & Sandifer Auto Service on Perkins Road is one of them.

“I don’t think they’re taking customers from us,” service manager Jeff Wiley says. “We get some business from them they can’t handle.”

The tire and auto repair shop, which has been in business 53 years and has an established and loyal customer base, wasn’t too concerned about the Wal-Mart effect, says Wiley, who considers the big-box retailer and his store “a little different.”

“Maybe this is me being arrogant or something, but the massive expansion of Lowe’s and Home Depot and Wal-Mart has been good for me, because they are so bad at what I do,” says Gordon Mese, owner of Garden District Nursery on Government Street. “They make me new customers every day.”

The big chains might beat him 50 cents or so on some items, but for a lot of customers it’s not worth fighting traffic.

“I’ve got a different clientele,” he says.

Aimee Gremillion

Mese has streamlined his business, however, getting out of the “gifty business” once the knickknack market became too crowded. These days, it’s “pots, plants and dirt,” and business is good despite the recession, he says.

Aimee and Craig Gremillion own a Learning Express toy store in Baton Rouge. While the company is a franchise, they promote that their store is locally owned and operated.

“Our store is truly a neighborhood toy store,” Craig Gremillion says. “We provide shoppers the peace of mind that comes from having their hard-earned money support the community in which they live,” which is even more important in a shaky economy, he says. Aimee Gremillion says they actually play with all the toys they sell, allowing them to make reliable recommendations to their customers.

Of course, no one can shop only at local stores, and even Cadzow, the Highland Coffees owner, differentiates between a well-run chain and a vaguely unpleasant one. And a local store can’t expect to survive solely on goodwill from shoppers who prefer to shop locally.

“If you’re out there trying to promote the idea of local businesses, it’s not going to work if the local business is no good,” he says. “People might say, ‘I want to support local businesses, but they suck, so I’m going to the chains.’”

Independent stores are famous for reacting, he says. But once a chain shows up on your turf, it’s too late to change your ways.

“I think that’s something you have to talk to your staff about,” Cadzow says. “You have to let them know. Don’t get comfortable just because there’s no competition right on our immediate block, because they could show up at any time.”