CHAIN STORE

A chain store consists of two or more retail outlets, operated by the same company, which sell the same kind of merchandise. The innovation of the chain store was conceived by American businessmen George Gilman (1830?–1901) and George Huntington Hartford (1833–1917) who, in 1859, set up the Great Atlantic & Pacific Tea Company in New York City. Better known as A&P, the stores proliferated rapidly, and other chain stores opened their doors for business, such as W.P. Woolworth (established 1879) and J. C. Penney (1902). The early twentieth century saw tremendous growth of the chain stores: Between 1910 and 1931, the number of A&P stores grew from 200 to more than 15,000. Department stores, also a byproduct of the late-1800s, catered to middle and upper class customers. Chain stores, including Woolworth's "Fiveand-Dimes" (which sold many items at low prices), served lower-income consumers.

Chain stores offer consumers many advantages and operate within all major retailing categories (including grocery stores, department stores, drugstores, as well as apparel and food outlets). Their system of centralized, mass buying allows them to acquire merchandise from manufacturers and wholesalers at reduced costs. Savings are passed along to the consumer, who pays less for the item. Further, chain stores can economize on advertising: A single ad placement promotes all the stores within the chain. During the 1920s independent retailers rallied against the chain stores, claiming they had unfair advantages. This argument has resurfaced off and on throughout the twentieth century as chain stores entered into more and more retailing sectors including hardware, jewelry, furniture, music, and books. But the only federal legislation that constructively attempted to regulate the chain stores came in 1936: the Robinson-Patman Act, which tried to control competition. Today chain stores account for roughly one-third of all American retail sales.