Chain store

Last updated

A chain store or retail chain is a retail outlet in which several locations share a brand, central management and standardized business practices. They have come to dominate the retail and dining markets and many service categories, in many parts of the world. A franchise retail establishment is one form of a chain store. In 2005, the world's largest retail chain, Walmart, became the world's largest corporation based on gross sales. [1]

Contents

History

Heritage W.H. Smith stall at Pickering railway station in North Yorkshire WH Smith, Pickering Station - geograph.org.uk - 2553628.jpg
Heritage W.H. Smith stall at Pickering railway station in North Yorkshire

In 1792, Henry Walton Smith and his wife Anna established W.H. Smith as a news vending business in London that would become a national concern in the mid-19th century under the management of their grandson William Henry Smith. [2] [3] The world's oldest national retail chain, the firm took advantage of the railway boom during the Industrial Revolution by opening news-stands at railway stations beginning in 1848. [3] The firm, now called WHSmith, had more than 1,400 locations as of 2017. [4]

In the U.S., chain stores likely began with J. Stiner & Company, which operated several tea shops in New York City around 1860. [5] By 1900, George Huntington Hartford had built The Great Atlantic & Pacific Tea Company, originally a tea distributor based in New York, into a grocery chain that operated almost 200 stores. Dozens of other grocery, drug, tobacco, and variety stores opened additional locations, around the same time, so that retail chains were common in the United States by 1910. Several state legislatures considered measures to restrict the growth of chains, and in 1914 concern about chain stores as a factor in passage of the Federal Trade Commission Act and the Clayton Antitrust Act. [6]

Post card ad listing eight cities and towns where Dewachter Freres offered "ready-to-wear clothes and by measure for men and children," c. 1885 Post card ad Dewachter Freres clothing stores pre-1886.png
Post card ad listing eight cities and towns where Dewachter Frères offered "ready-to-wear clothes and by measure for men and children," c. 1885

Isidore, Benjamin and Modeste Dewachter originated the idea of the chain department store in Belgium in 1868, [7] [8] ten years before A&P began offering more than coffee and tea. They started with four locations for Maisons Dewachter (Houses of Dewachter): La Louvière, Mons, Namur and Leuze. [7] They later incorporated as Dewachter frères (Dewachter Brothers) on January 1, 1875. [9] The brothers offered ready-to-wear clothing for men and children and specialty clothing such as riding apparel and beachwear. [8] Isidore owned 51% of the company, while his brothers split the remaining 49%. [9] Under Isidore's (and later his son Louis') leadership, Maisons Dewachter would become one of the most recognized names in Belgium and France with stores in 20 cities and towns. Some cities had multiple stores, such as Bordeaux, France. [8] [10] [11] Louis Dewachter also became an internationally known landscape artist, painting under the pseudonym Louis Dewis.

By the early 1920s, chain retailing was well established in the United States, with A&P, Woolworth's, American Stores, and United Cigar Stores being the largest. [12] By the 1930s, chain stores had come of age, and stopped increasing their total market share. Court decisions against the chains' price-cutting appeared as early as 1906, and laws against chain stores began in the 1920s, along with legal countermeasures by chain-store groups. [13] State taxes on chain stores were upheld by the U.S. Supreme Court in 1931. Between then and 1933, 525 chain-store tax bills were introduced in state legislatures, and by the end of 1933 special taxes on retail chains were in force in 17 states. [14]

Characteristics

A chain store is characterised by the ownership or franchise relationship between the local business or outlet and a controlling business.

Difference between a "chain" and formula retail

While chains are typically "formula retail", a chain refers to ownership or franchise, whereas "formula retail" or "formula business" refers to the characteristics of the business. [15] There is considerable overlap because key characteristic of a formula retail business is that it is controlled as a part of a business relationship, and is generally part of a chain. Nevertheless, most codified municipal regulation relies on definitions of formula retail (e.g., formula restaurants), [16] [17] [18] in part because a restriction directed to "chains" may be deemed an impermissible restriction on interstate commerce (in the US), or as exceeding municipal zoning authority (i.e., regulating "who owns it" rather than the characteristics of the business). [19] [20] Non-codified restrictions will sometimes target "chains". A municipal ordinance may seek to prohibit "formula businesses" in order to maintain the character of a community and support local businesses that serve the surrounding neighborhood. [21]

Decline

Brick-and-mortar chain stores have been in decline as retail has shifted to online shopping, leading to historically high retail vacancy rates. [22] The hundred-year-old Radio Shack chain went from 7,400 stores in 2001 to 400 stores in 2018. [23] FYE is the last remaining music chain store in the United States and has shrunk from over 1,000 at its height to 270 locations in 2018. [24] In 2019, Payless ShoeSource stated that it would be closing all remaining 2,100 stores in the US. [25]

Restaurant chains

Opening the first of its chain of teashops in 1894, branch of Lyons in Reading, Berkshire pictured in 1945 A Picture of a Southern Town- Life in Wartime Reading, Berkshire, England, UK, 1945 D25380.jpg
Opening the first of its chain of teashops in 1894, branch of Lyons in Reading, Berkshire pictured in 1945
A Subway franchise restaurant Subway restaurant in the basement of Raffles City Shopping Centre, Singapore - 20060529.jpg
A Subway franchise restaurant

A restaurant chain is a set of related restaurants in many different locations that are either under shared corporate ownership or franchising agreements. [26] Typically, the restaurants within a chain are built to a standard format through architectural prototype development and offer a standard menu and/or services. [16] Fast food restaurants are the most common, but sit-down restaurant chains also exist. [27] Restaurant chains locations are often found near highways, shopping malls and densely populated urban or tourist areas.

Britain

In 1896, Samuel Isaacs from Whitechapel, east London opened the first fish and chips restaurant (as opposed to a take-away) in London, and its instant popularity led to a chain comprising 22 restaurants with locations around London and seaside resorts in southern England including Brighton, Ramsgate and Margate. [28] [29] In 1864, the Aerated Bread Company (ABC) began operating a chain of teashops in Britain. ABC would be overtaken as the leader in the field by Lyons, co-founded by Joseph Lyons in 1884. From 1909 Lyons began operating a chain of teashops which became a staple of the High Street in the UK, and at its peak, the firm numbered around 200 cafes. [30]

Opposition

The displacement of independent businesses by chains has sparked increased collaboration among independent businesses and communities to prevent chain proliferation. These efforts include community-based organizing through Independent Business Alliances (in the U.S. and Canada) and "buy local" campaigns. In the U.S., trade organizations such as the American Booksellers Association and American Specialty Toy Retailers do national promotion and advocacy. NGOs like the New Rules Project and New Economics Foundation provide research and tools for pro-independent business education and policy while the American Independent Business Alliance provides direct assistance for community-level organizing.

Regulation and exclusion

A variety of towns and cities in the United States whose residents wish to retain their distinctive character—such as San Francisco; [31] Provincetown, Massachusetts and other Cape Cod villages; Bristol, RI; [32] McCall, Idaho; Port Townsend, Washington; Ogunquit, Maine; Windermere, Florida and Carmel-by-the-Sea, California—closely regulate, even exclude, chain stores. They don't exclude the chain itself, only the standardized formula the chain uses, described as "formula businesses". [33] For example, there could often be a restaurant owned by McDonald's that sells hamburgers, but not the formula franchise operation with the golden arches and standardized menu, uniforms, and procedures. The reason these towns regulate chain stores is aesthetics and tourism. [33] Proponents of formula restaurants and formula retail allege the restrictions are used to protect independent businesses from competition. [21] [34]

See also

Related Research Articles

<span class="mw-page-title-main">WHSmith</span> British retailer

WH Smith PLC, trading as WHSmith, is a British retailer, with headquarters in Swindon, England, which operates a chain of high street, railway station, airport, port, hospital and motorway service station shops selling books, stationery, magazines, newspapers, entertainment products and confectionery.

<span class="mw-page-title-main">Canadian Tire</span> Canadian retail company

Canadian Tire Corporation, Limited is a Canadian retail company which operates in the automotive, hardware, sports, leisure and housewares sectors. Its Canadian operations include: Canadian Tire, Mark's, FGL Sports, PartSource, and the Canadian operations of Party City. Canadian Tire acquired the Norwegian clothing and textile company Helly Hansen from the Ontario Teachers' Pension Plan in 2018.

<span class="mw-page-title-main">Ready-to-wear</span> Mass-produced clothing in standard sizes

Ready-to-wear (RTW) – also called prêt-à-porter, or off-the-rack or off-the-peg in casual use – is the term for garments sold in finished condition in standardized sizes, as distinct from made-to-measure or bespoke clothing tailored to a particular person's frame. In other words, it is a piece of clothing that was mass produced in different sizes and sold that way instead of it being designed and sewn for one person. The term off-the-peg is sometimes used for items other than clothing, such as handbags. It is the opposite of haute couture.

<span class="mw-page-title-main">Kohl's</span> American department store chain

Kohl's is an American department store retail chain, operated by Kohl's Corporation. It currently has 1,165 locations, operating stores in every U.S. state except Hawaii. The company was founded by Polish immigrant Maxwell Kohl, who opened a corner grocery store in Milwaukee, Wisconsin, in 1927. It went on to become a successful chain in the local area, and in 1962 the company branched out by opening its first department store. British American Tobacco Company took a controlling interest in the company in 1972 while still managed by the Kohl Family, and in 1979, the corporation was sold to BATUS Inc. A group of investors purchased the company in 1986 from British American Tobacco and took it public in 1992.

<span class="mw-page-title-main">Disney Store</span> Company selling Disney products

The Disney Store is a chain of specialty stores selling only Disney related items, many of them exclusive, under its own name and Disney Outlet. It was a business unit of Disney Consumer Products with the Disney Experiences segment of The Walt Disney Company conglomerate.

Ben Franklin is a chain of five and dime and arts and crafts stores found primarily in small towns throughout the United States, currently owned by Promotions Unlimited of Mount Pleasant, Wisconsin. They are organized using a franchise system, with individual stores owned by independent proprietors. It was perhaps the first retail franchise, starting in 1927. They are named after Benjamin Franklin, taking a cue in their merchandise offerings from Franklin's saying, "A penny saved is a penny earned."

<span class="mw-page-title-main">Dillard's</span> American department store chain

Dillard's, Inc. is an upscale American department store chain with approximately 282 stores in 29 states and headquartered in Little Rock, Arkansas. Currently, the largest number of stores are located in Texas with 57 and Florida with 42. The company also has stores in 27 more states; however, it is absent from the Northeast, most of the Upper Midwest, the Northwest, and most of California, aside from three stores.

<span class="mw-page-title-main">Potbelly Sandwich Shop</span> American fast-casual restaurant chain

Potbelly Corporation, more commonly known as Potbelly Sandwich Shop or Potbelly Sandwich Works, is a publicly traded American fast-casual restaurant chain that focuses on submarine sandwiches and milkshakes. Potbelly was founded in 1977 in Chicago, and its name refers to the potbelly stove. Potbelly's menu features a variety of sandwiches that are all served hot, and the menu includes soup, shakes, smoothies, potato chips and cookies. Some locations formerly presented live music from local musicians during the lunch hours.

<span class="mw-page-title-main">Crate & Barrel</span> International home decor company

Euromarket Designs Inc., doing business as Crate & Barrel, is an international furniture and home décor retail store headquartered in Northbrook, Illinois. They employ 8200 employees across over 100 stores in the United States and Canada, with franchises in Central America, South America, Asia and United Arab Emirates.

Arcadia Group Ltd was a British multinational retailing company headquartered in London, England. It was best known for being the previous parent company of British Home Stores (BHS), Burton, Dorothy Perkins, Debenhams, Evans, Miss Selfridge, Topman, Topshop, Wallis and Warehouse. At its peak, the group had more than 2,500 outlets in the UK and concessions in UK department stores and several hundred franchises operated internationally.

<span class="mw-page-title-main">E-Land Group</span> South Korean conglomerate

E·Land Group (Korean: 이랜드그룹) is a South Korean conglomerate headquartered in Changjeon-dong Mapo-gu Seoul, South Korea. E-Land Group takes part in retail malls, restaurants, theme parks, hotels, and construction businesses as well as its cornerstone, fashion apparel business. It has operations worldwide through its subsidiary E-Land World.

<span class="mw-page-title-main">Smoothie King</span> American fast food chain

Smoothie King Franchises Inc. is an American privately held company that operates a chain of retail stores that specialize in selling smoothies. Founded in 1973, the company was bought by a South Korean franchisee in 2012. In the late 2010s, the company was focusing on whole and unmodified ingredients.

SandpiperCI is a retail and food and beverage operator based in the Channel Islands. It mostly operates franchises of British chain stores, such as Marks & Spencer, Iceland, Morrisons, Costa Coffee, Burger King and Matalan, in British Crown Dependencies and Overseas Territories. It also operates own-brand Checkers stores in Jersey and Guernsey and an Apple retailer called iQ.

<span class="mw-page-title-main">Louis Dewis</span> Belgian Post-Impressionist painter

Louis Dewis (1872–1946) was the pseudonym of Belgian Post-Impressionist painter Louis DeWachter, who was also an innovative and highly successful businessman. He helped organize and managed the first department store chain.

Retail design is a creative and commercial discipline that combines several different areas of expertise together in the design and construction of retail space. Retail design is primarily a specialized practice of architecture and interior design; however, it also incorporates elements of industrial design, graphic design, ergonomics, and advertising.

Kahala Brands is a wholly owned subsidiary of Canada-based MTY Food Group Inc. of Montreal, Quebec. Based in Scottsdale, Arizona, Kahala is one of North America's largest holding company of franchise fast food restaurant companies. In May 2016, the publicly traded Canadian MTY Food Group announced a friendly takeover deal with the Kahala Brands. MTY agreed to pay about US$300 million to acquire Kahala. The two companies generated nearly $2 billion in revenues in the previous year. Jeff Smit was chosen to lead the US operations of MTY.

<span class="mw-page-title-main">Eason & Son</span> Irish retail company

Eason Retail PLC, known as Easons or Eason, is an Irish retail company best known for selling books, stationery, cards, gifts, newspapers and magazines. Headquartered in Swords, County Dublin, it is the largest supplier of books, magazines, and newspapers in Ireland.

<span class="mw-page-title-main">Retail apocalypse</span> 2010s decline in American retail stores

Retail apocalypse refers to the closing of numerous brick-and-mortar retail stores, especially those of large chains, beginning around 2010 and accelerating due to the mandatory closures during the COVID-19 pandemic.

<span class="mw-page-title-main">EG Group</span> British retail group

EG Group is a British operator of filling stations, convenience stores and food service providers across Europe, the United States and Australia. It was founded in Blackburn in 2001 by brothers Mohsin and Zuber Issa, initially as Euro Garages.

A formula restaurant is a type of formula retail business. It is characterized as a restaurant regulated by contractual or other arrangements to standardize menus, ingredients, food preparation, interior and exterior design and/or uniforms. The term refers to the characteristics of the restaurant rather than its ownership, following a business model controlled by an overseeing corporation. Most formula restaurants are chain restaurants, though this does not have to be the case.

References

  1. ↑ "Wal-Mart Stores on the Forbes Global 2000 List". Forbes. Archived from the original on May 18, 2012. Retrieved June 7, 2017.
  2. ↑ "WH Smith expansion is given wings with takeover of Marshall Retail". The Times. Retrieved June 22, 2022. WH Smith is the world's oldest national retail chain after being started by Henry Smith as a newspaper shop in 1792
  3. 1 2 "History of WHSmith - About WHSmith". Whsmithplc.co.uk. Archived from the original on December 29, 2011. Retrieved August 2, 2018.
  4. ↑ "Our stores - About WHSmith". Whsmithplc.co.uk. Archived from the original on October 26, 2017. Retrieved August 2, 2018.
  5. ↑ Marc Levinson, The Great A&P and the Struggle for Small Business in America, 2nd ed (2019), p. 14.
  6. ↑ Levinson, p. 67.
  7. 1 2 Le Pantheon de L'Industrie, Paris, 1891, Page 20
  8. 1 2 3 "The Dewis Collection - The Art of Louis Dewis". Louisdewis.com. Archived from the original on August 21, 2017. Retrieved February 18, 2019.
  9. 1 2 Annexes to the Belgian Monitor of 1875. Acts, Extracts of Acts, Minutes and Documents relating to Corporations, Book #3, Page 67
  10. ↑ France, Maison Dewachter, Bordeaux (August 2, 2018). "English: This is the letterhead for the Bordeaux location of Maison Dewachter, a chain of men's and boys' clothing stores in Belgium and France". Archived from the original on May 3, 2018. Retrieved August 2, 2018– via Wikimedia Commons.{{cite web}}: CS1 maint: multiple names: authors list (link)
  11. ↑ "Magasins de prêt-à-porter sur Montpellier". Dewachter.fr. Archived from the original on January 10, 2019. Retrieved January 8, 2019.
  12. ↑ Hayward WS, White P, Fleek HS, Mac Intyre H (1922). "The chain store field". Chain Stores: Their Management and Operation. New York: McGraw-Hill. pp.  16–31. OCLC   255149441.
  13. ↑ Lebhar GM (1952). Chain Stores in America: 1859–1950. New York: Chain Store Publishing Corp. OCLC   243136.
  14. ↑ Levinson, p. 122.
  15. ↑ "Formula Business | legal definition of Formula Business by Law Insider". www.lawinsider.com. Archived from the original on August 31, 2020. Retrieved August 31, 2020.
  16. 1 2 Town of Jaffrey Planning Board Proposed Zoning Changes Summary Archived June 13, 2018, at the Wayback Machine , Public Hearing January 22, 2018, Town of Jaffrey, New Hampshire (.pdf)
  17. ↑ Permit how-to guides - chain stores (formula retail use) Archived June 2, 2018, at the Wayback Machine , Planning Dept., City and Cty. of San Francisco
  18. ↑ "Chapter 17.54 FORMULA RETAIL AND RESTAURANT ESTABLISHMENTS". Codepublishing.com. Archived from the original on June 26, 2018. Retrieved August 2, 2018.
  19. ↑ The Park at Cross Creek v. City of Malibu Archived June 25, 2018, at the Wayback Machine Calif. Ct. App., 2nd. Dist. Filed 21-Jun-2017 (.pdf)
  20. ↑ Chain Store Ordinance Resurrected From the Dead Archived November 5, 2017, at the Wayback Machine , The Malibu Times 1-Nov-2017
  21. 1 2 "Formula Business Restrictions". Institute for Local Self-Reliance . December 2008. Archived from the original on May 24, 2018. Retrieved May 23, 2018.
  22. ↑ "Amid brick-and-mortar shakeup, Greater Hartford's retail vacancy rate shrinks". Hartford Business Journal. Archived from the original on January 8, 2019. Retrieved January 8, 2019.
  23. ↑ Carter, Clint (November 27, 2018). "RadioShack Is Now Selling in Unexpected Places. Will Anyone Buy?". Entrepreneur. Archived from the original on December 1, 2018. Retrieved January 8, 2019.
  24. ↑ "Bob Higgins, Pioneering Founder of Trans World and FYE, Dead at 75". Billboard. Archived from the original on December 6, 2018. Retrieved January 8, 2019.
  25. ↑ Business, Ahiza Garcia, CNN (February 16, 2019). "Payless is closing all its 2,100 US stores". CNN. Archived from the original on February 19, 2019. Retrieved February 19, 2019.{{cite web}}: |last= has generic name (help)CS1 maint: multiple names: authors list (link)
  26. ↑ Jakle, J.A.; Sculle, K.A. (2002). Fast Food: Roadside Restaurants in the Automobile Age. The road and American culture. Johns Hopkins University Press. p. 68–. ISBN   978-0-8018-6920-4. Archived from the original on July 27, 2020. Retrieved December 29, 2017.
  27. ↑ "The 20 best chain restaurants in America". Business Insider France (in French). Archived from the original on August 27, 2017. Retrieved June 7, 2017.
  28. ↑ Jolles, Michael A.; Rubinstein, W. (2011). The Palgrave Dictionary of Anglo-Jewish History. Palgrave Macmillan. p. 457.
  29. ↑ Walton, John K. Fish and Chips, and the British Working Class, 1870-1940. A&C Black. p. 34.
  30. ↑ "Bawden and battenberg: the Lyons teashop lithographs". The Guardian. Retrieved June 26, 2022.
  31. ↑ "Compromise reached on San Francisco's chain store limits". Sfgate.com. November 5, 2014. Archived from the original on March 12, 2017. Retrieved August 2, 2018.
  32. ↑ "USATODAY.com - Cities put shackles on chain stores". Usatoday30.usatoday.com. Archived from the original on March 12, 2017. Retrieved August 2, 2018.
  33. 1 2 Analysis of Cities with Formula Business Ordinances Archived May 23, 2018, at the Wayback Machine , Malibu, California (.pdf)
  34. ↑ "Cape Cod Residents Keep the Chain Stores Out" Archived November 18, 2016, at the Wayback Machine article by Beth Greenfield June 8, 2010

Further reading

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.