The district of Hoxton in North London has many traditional local businesses, some of them with histories stretching back into the last century. There is Mister J. Jopling and Partners trading from the Old Whyte Cube, purveyors of trusted bluechip artworks; round the corner is Shhh, merchants of erotic products exclusively for ladies, and the 333 old-time music hall.

Nearby there is The Rivington Arms, a charming local inn where artisans from the website industry that has scarred the surrounding landscape slake their thirst. A few are still sporting their traditional “Hoxton Fin” hairstyles and handcrafting text messages on their characteristic BlackBerrys.

The artist Bob and Roberta Smith (one person) — by his own admission a campaigner for “crazy lost causes” — has chosen this deprived area of North London to site his latest project, Shop Local. Bob has chosen five local traders, for whom he has designed advertisements to be painted on walls sited around the area. His choices reflect the independent shops that manage to hang on despite the onslaught of trendiness and supermarkets that now set up their own versions of “local” shops. In bustling quarters of the city nowadays you are never more than a Manolo’s click away from ready-made marinated asparagus salad.

Bob and Roberta Smith is an artist I respect. He is thoughtful, political and enjoys a good old dig at the art world while still being a part of it. And he is very funny. His is a world of angry citizens, old-school popstars, small ads, convoluted in-jokes and “ideas I have in the bath”. He set up the Leytonstone Centre for Contemporary Art, which was a shed in his back garden. His stock in trade is signage. He has made banners declaring “Art is my airplane”, beer mats stating “I believe in Dürer” and placards claiming “Jeffrey Archer is a political prisoner”.

Beautifully handpainted on found pieces of wood, his signs remind me of 1950s tradesmen’s vans or protest marches. They hark back to a world before the ubiquity of the pamphlet knocked up on Photoshop and the harsh glare of laser-cut Plexiglass shopfronts.

The Shop Local project is at once nostalgic and also knowing. One ad is for Hoxton Electrovision, and in old-style lettering lists its wares as including sandwichmakers, 250-watt turbo-woofers and widescreen TVs. The paintings will be allowed to remain for a year, but I hope that people will see their peeling remains in a century when their message seems as outmoded as the Victorian and Edwardian murals selling patent medicines and ladies’ afternoon gloves.

Bob’s other signs are for an Afro-Caribbean hairdresser called Dad’s, Discoveries bric-a-brac shop, a Turkish greengrocer, Hoxton Fruit and Veg, and Ron’s eel and shellfish stall. The latter, as well as having a large advert resplendent with a giant prawn on the canal side at Haggerston, also has posters up all over the Underground. Bob thinks that this is like the plot of an Ealing comedy, where a tiny trader gets a chance for one last push at the big time before retirement.

I accuse him of making sentimental choices, these must be businesses that are doomed to fold unless they start stocking Jamie Oliver and Cath Kidston. But he says no. Often these shops thrive because they serve niches that are ignored by the big chains — exotic immigrant diets of wiggly vegetables and ugly fish or that odd-sized lightbulb, screw or latch.

There is a thick seam of irony in this project when one thinks about the social changes that edge out these kinds of businesses, the process of gentrification. First, a vanguard of poor artists, such as Bob and I once were, move in to cheap areas for purely pragmatic reasons. Around them grows up an infrastructure of wholefood cafés, boho bars and pioneering galleries.

Then the designers follow, doing up old industrial spaces for offices and studios that ooze supplement editorial. By now the area is “happening” and has a buzz that attracts the bridge-and-tunnel readers of style mags. Then developers sniff the corpse of local culture and swoop in to turn every run-down block into clean, modern apartments for sofa-advert couples with shiny hair and gym bodies.

Childless careerists like their locale to have sterilised doses of character packaged by guerrilla marketing consultants. Hoxton, though, despite having been doused by a stiffly gelled wave of gentrification over the past decade, has managed to hang on to that elusive local authenticity. Maybe it’s because a lot of those charming poor people still live in the vicinity. This irony is not lost on Smith, who once made a sign saying “Artists ruin it for everyone”.

Bob does a lot of projects involving the public. He got them to suggest slogans at Tate Britain, talk about potatoes in Barcelona and make cardboard cars in Middlesbrough.

Galleries like this because they get a lot of funding through their education departments. But Bob admirably admits: “I want to exploit the public for my own ends.” He goes further: “Artists launder guilt through art they call socially engaged, just like crooks launder cash.”

Bob and I finish up our apple and cranberry crumble and head back to our houses on the coast. He has also produced a nice bag printed with the Shop Local logo — perfect for your next trip to your local Tesco.

Shop Local signs are appearing at five locations in Shoreditch, London EC2; an exhibition of Bob and Roberta Smith’s recent work is at Peer, 99 Hoxton Street, London N1 (www.peeruk.org; 020-7739 8080), Wed to Sat, noon to 6pm, until Oct 14