Erica Walter, age 13, of Santa Cruz, Calif., for her question:
WHEN DID THE FIRST CHAIN STORES START?
Chain stores are two or more retail stores that deal in the same general kind of merchandise and that are operated by the same organization. Two American businessmen are credited with the development of chain store retailing. They founded what was to become the A&P, the Great Atlantic and Pacific Tea Company, in New York City in 1859.
The two businessmen were George Huntington Hartford and George F. Gilman.
A chain store outlet is also known as a multiunit and is generally operated by an employee manager rather than an individual owner. The manager of a chain store, unlike the independent retailer, does not make policy decisions and is responsible to the individual or company that owns the store.
Chain stores today deal mainly in the general merchandise, food, variety, discount, drug and shoe store areas.
Although chain store systems existed before the first A&P opened, and one is said to have been operating in China as early as 200 B.C., the multiunit system as understood today was developed only as recently as the middle of the 19th century.
Advantages of the chain store system, such as lower price structures, are achieved mainly because of buying efficiency that is the result of centralized buying procedures and because the multiunit organization allows for large scale buying. This fact was the prime reason for the great increase nationally in the number of stores created through merger and acquisition from 1910 to 1931.
As an example, from 1910 to 1930, the A&P outlets increased from 200 to 15,670 units, and the J.C. Penney Co., stores, founded in Wyoming, grew from 14 to 1,459 units.
Chain stores, distinguished by central ownership, should not be confused with franchise operations, which involve individual ownership of many units carrying a single trade name.
In the early 1920s, many independent retailers and their suppliers began to organize in opposition to the competition of chain stores. By 1933, a total of 689 anti chain store bills had been introduced in 28 states. Most of these were tax measures.
Official legislation against chain stores declined after 1933. About 100 such bills have been introduced since then, and, of these, only one was actually enacted.
Despite attempts to curtail their activities, chain store systems continued to grow. Today many major chains are diversifying into related fields to broaden the profit base and to expand sales. Some general mechandise chains, as an example, have launched extensive private label programs for their merchandise.
Although there are chain stores all over the United States, the major chains tend to be concentrated in large urban areas to take advantage of mass markets.
Besides retail stores, chain operations also include theaters, banks, hotels and some public utilities.