It'll be interesting to see how the new Lewes Pound currency does. Lewes residents will be able to get 10% off at its launch over the next 2 weeks, i.e. get 22-pounds-worth of Lewes cash for just £20.
The main advantage of local currency is that the local economy is tied more closely to the population; the Lewes Pound unites Lewes business and survival with a local shop culture. In other words, sustenance, trading, ambience and sociality are all linked together. Compare that to the fleets of clone towns around the UK, where the "shop culture" or "ambience" is totally un-unique (or "ique"). Money given to the hydra-head of any chain store flows directly out of the local community - in other words, away from you, and from the people you know. The chances of getting it back in are not necessarily low, but the opportunities to control those chances are completely out of your hands.
What'd be really interesting is if you could get prices down as a result of setting up those local links - effectively being able to give people a discount if they were using local currency, because it costs businesses less. Economists will see this as the opposite of Economies of Scale, and so it wouldn't make sense from that point of view. But with the Costs of Scale rising sharply (namely transport costs), maybe the advantages of a satisfied community get closer to the advantages of Economies of Scale.
Of course, currently that's like comparing cabbages and cows - chain stores don't do community or happiness, and community satisfaction doesn't measure well numerically. Places like Lewes and Totnes - places that value their community while it still exists - are well placed to take advantage of their local attitude in the face of rising global costs.
Philosophy vs Profit. FIGHT.